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Gas prices will increase in December

Scottish and Southern Energy today announced it is increasing gas prices by 9.4% in December. Energy experts claim it is likely other suppliers will soon follow suit.

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by Victoria Bischoff on Oct 29, 2010 at 16:08

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Scottish and Southern Energy (SEE) today announced it is increasing gas prices by 9.4% for around 3.6 million customers from December 1.

This means the average gas bill will cost consumers between £4.64 and £5.60 more a month - around £60 a year - depending on the amount of gas they use.

Experts in the industry are furious over SSE’s price hike, and claim it is likely to spark other energy suppliers to follow suit and hike their prices too.

Why are prices rising

The energy giant blames the price hike on increasing wholesale gas prices, and the cost of investing in modernising Britain’s energy infrastructure.

Alistair Phillips-Davies, energy supply director of SSE, said: ‘The last few months have been marked by rising wholesale gas prices and, having absorbed losses in our gas supply business for some time, we can not delay an increase in retail prices any longer’.

‘I am sorry it will take effect during the winter period,’ he added.

The price hike comes less than a month after EDF Energy increased electricity prices for 1.2 million customers blaming distribution costs and realignment to Ofgem's cost reflectivity rules.

What the experts say

Ann Robinson, director of consumer policy at uswitch, said: ‘This is unacceptable’.

‘Ofgem’s recent report into wholesale prices suggested that a price hike could be imminent in spring. This would at least have bought households some time and would have seen any increases hitting bills after the winter,’ Robinson said.

‘What nobody wants to see is a repeat of 2008 when suppliers last put prices up and bills rocketed by £381 or 42% as a result,’ she added.

Audrey Gallacher, head of energy at Consumer Focus, meanwhile said: ‘We are worried that this could be the start of some serious bad news for all consumers. While we hope that other companies don’t follow suit, history has shown us they adopt a pack mentality on pricing’.

‘For the past year Consumer Focus has argued that companies should have reduced prices when wholesale costs were low. They did not and consumers missed out. SSE’s gas prices have fallen by 2% since wholesale costs peaked in 2008, while the wholesale gas price is still more than 40% lower than it was,’ she added.

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10 comments so far. Why not have your say?

It's always the same the price goes up when you need to use it. That way gas companies can give stats that the average price for gas over time was x which is lower than the average price per unit sold people pay for gas.

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To be honest, I don't see any role for OffGem now. They are powerless to act and powerless to enforce. Every year Energy prices rise. The competition is poor and so its hard to do anything about it. The suppliers are all a much of a muchness. Government cannot act either as most Energy companies are owned by French companies now. I'm not sure what role the Energy watchdogs play these days. They don't seem to have any powers at all so why bother with their existence.

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Don't worry, folks, Consumer Focus is about to be abolished so you will have nobody left to bleat on your behalf.

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I'm sure I read recently that wholesale prices for gas are low so it isn't worth building storage for it in the UK.....Another scam I suppose, but do our politicians care?

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I guess its all down to the same thing. Rip off britain.They encourage you to insulate your house to cut down on the bills then the energy rises so what you have saved has now been taken away from you. The consumer groups are not worth the money spent on them. Maybe if they were abolished we could use the money to bring down the energy bills.

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"The energy giant blames the price hike on increasing wholesale gas prices, and the cost of investing in modernising Britain’s energy infrastructure" ( BIGGEST LOAD OF RUBBISH AT LEAST THEY CAN BE HONEST ENOUGH TO SAY. WE CAN RIP YOU OFF ANYTIME WE WANT TO WITH INANE COMMENTS AS ABOVE)

RIP OFF BRITAIN IT IS. THE GREEDY POWER COMPANIES KNOW THERE IS NO ONE TO PROTECT THE CONSUMER ANYMORE.

NOT THAT THEY WERE ANY USE TO THE CONSUMER AT THE BEST OF TIMES.

APART FROM TAKING FAT SALARIES AND SITTING ON THEIR FAT BACKSIDES.

THIS OR ANY GOVERNMENT WILL DO NOTHING FOR THE CONSUMER AND THAT IS A FACT.

SO THE PROFITS MULTIPLY THEY GETTER RICHER AND THE ORDINARY CONSUMER GETS POORER.

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This is tosh. Two years ago the price of gas was 9 and now it is 4. See

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=UK%3Axta&time=4&freq=1

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What I don't understand is this: If the energy companies are "absorbing" price rises for us for so long, why is it that year on year their profits rise? If they were absorbing costs and/or they are passing on the price rises to us then why do their profits not stay the same each year? No they seem to pass on price rises plus some extra profit on top each and every time, yet do little to nothing to pass on any cuts. I don't understand how this system is supposed to "work". The government needs to put a limit on profits for energy companies. What are they going to do? Leave the country?

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I think quite a lot of the energy companies are already in France and Germany.

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Ian McKean

Nov 01, 2010 at 16:48

Tim, look at that chart whose address I gave you. It will answer your question.

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