EDF Energy will raise its standard variable tariffs by 12 per cent from October 1 to account for rising whole-sale fuel costs.
The energy supplier is the first of the industry’s Big Six to make the move after Ofgem, the regulator, decided to increase its cap on the most widely used tariffs by about 12 per cent because of soaring global gas prices.
Default tariff customers typically will find that dual-fuel bills increase by 12 per cent to £1,277. The price cap will add £139 to the average bill for 11 million households on their suppliers’ default tariff. It is the largest increase since the price cap came in more than two years ago.
Standard variable tariffs are regulated by the energy watchdog with a cap on electricity and gas bills in an effort to end what Theresa May, the former prime minister, called “rip-off” prices charged by energy companies.
“As Ofgem has explained, global gas prices have caused the unprecedented increase in wholesale energy costs and, as a sustainable long-term business, we must reflect the costs we face,” Philippe Commaret, head of EDF’s UK retail business, said. “We know a price rise is never welcome, especially in tough times.” He added that the company would cut prices again as soon as it was able to do so.
Gas prices around the world have soared this year owing to factors including low stock levels, outages at gas plants and gasfields that have curbed domestic, Norwegian and Russian supplies and a buying spree in Asia that has led to fewer international deliveries of liquefied natural gas.
While EDF is the first to announce it is raising its prices, it is likely that other providers will follow.