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EDF Energy has raised its prices by almost a fifth from today without warning, hitting customers with double-digit price increases in what is expected to be an industry-wide rush to put up gas and electricity bills.
The French-owned electricity giant's five million customers will see an immediate 17 per cent increase in electricity bills and a 22 per cent increase in gas, which it blamed on wholesale prices that have risen by 70 per cent since the beginning of the year.
Most customers will have to pay almost £4 a week or £200 a year more for their energy.
Eva Eisenschimmel, chief operating officer of EDF Energy Customers Branch, said: “Record world oil prices have continued to drive up wholesale gas prices. Alongside unprecedented rises in wholesale coal and electricity costs, this has impacted hugely on the cost of supplying energy to our customers.
"We have been absorbing some of these costs in recent months, but we now have to pass on some of the resulting rise in wholesale costs to our customers. While the rise in wholesale prices is out of our control, we have been doing everything possible to keep our own costs in check."
The other five main energy suppliers are quickly expected to follow suit, with most expected to raise their prices before the end of August. Yesterday Scottish and Southern, the UK's second biggest energy supplier, said it was under unbearable pressure to raise its prices and would have to bow to that pressure soon.
British Gas, the UK's biggest supplier with 16 million customers, is expected to reveal a slump in profits at its residential supply business when it reports interim results next week. British Gas is also widely expected to put up prices in the next few weeks after it released a report last week that said that with oil at about $140 a barrel, the price of gas for an average household could hit £1,000 a year over the next two years.
EDF Energy moved quickly to try and minimise the impact on its most vulnerable customers, saying that 100,000 of its most-in-need customers would benefit from a 15 per cent discount, after it expanded its social tariff.
However, it is spending just £11 million on targeted help for vulnerable customers.
A spokesman for EDF Energy said that it had been making preparations to raise prices for several weeks and the timing of its the decision, taken last night, had been dictated by business matters.
"There's never a good time to announce price increase but we have seen unprecedented increases in wholesale energy costs and are tariff changes are as a result of that," the spokesman said.
EDF Energy's announcement that it is to put up prices has coincided with speculation that its parent company EDF is very close to buying British Energy, the nuclear generator, for more than £11 billion.
EDF denied that there was any link between the British Energy deal and its tariff increases. "Our planned investment in new nuclear has to be seen as part of a long-term strategy and part of our responsiblities to safeguarding future energy supplies," he said.
Wholesale energy prices have increased by 70 per cent for coal, 63 per cent for gas and 47 per cent for electricity since EDF Energy last increased its prices in January, EDF said.
According to industry sources gas prices for the winter are double what they were last winter, with winter gas trading at 94p a therm, compared with 48p a therm last year.
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Why do we have to subsides France. This contries policies are a total shambles we sell off all our major companies to be run be europe ie airports (Spain) Utility companies(France)
R. Craik, Perth, Scotland
In the current economic climate it is a fact of life that energy prices are going to increase. With all the recent studies on waste etc it will come as no surprise that waste is also very important when it come to energy.
Try switching your heating off.
Heat water when you know it will be used.
Derk Gibbon, Dunfermline, Fife, Scotland
Why doesn't the government apply a windfall tax?
Richard, Bexhill, UK
" A small price to pay" to help our European friends engage in the latest GB sell out of the nations assets. The regulators will not allow mergers of our co's beyond a certain limit, but it is fine for mainland co's to gobble up the resulting fragments in the name of "European integration".
D.L. Stephens, York, England
As the UK arm of state-run French power giant, does anyone know if EDF raised its electricity prices in France? Or are British customers underwriting French consumers?
Tim , London,
When is someone in the UK going to question EDF as to why they are not increasing their prices in France by similar percentages?
UK customers subsidising french customers?
The UK selling our future major electricity producing industry to EDF - madness!
John Henderson, Castelnau de Levis, France
Disgraceful.
The price of oil is $2 down on the day and nearly $25 down from its peak. The energy companies should be reducing their prices, not raising them
geoff, Cardiff, uk
Wake up Britain, in not too many years the lights in this country will begin to go out if we do not build new power generation soon, our system is old and we are becoming far too dependent on imported gas etc.. The French have looked ahead as demonstrated in the comment by Andy above.
Dave, Winchester,
It should come as no surprise that EDF will take over British Energy, Gordon Brown's brother Andrrew has been working for the company since September 2004.
What was the point of privatising our energy market, for it to fall into French state control?
Edna Burbridge, Engreve, France
I have just emailed EDF asking for a price comparison between their charges for French and UK domestic users. One or two comments I read suggested it might be a good idea. They say they will reply in ten days, perhaps a Times enquiry might get a speedier reply?
V. Glover, Penzance, UK
Electricity in France costs 0.04 Euros per unit (Kwh) But ours is over 80% Nuclear.
Andy, Correze, France
This country puts Billions of pounds more into the European coffers than it receive. So why is the price of gas more expensive than the other countries in Europe?
We have under Labour, become the mugs of this organisation.
A Walton, Leicester, England
So the government permits even more concentration of an already overconcentrated industry by flogging BE to EDF. For starters supply must be split from generation asap and then the existing EDF portfolio of generation forcibly divested. Then we might have a market.
Richard, Newton Abbot,
These are the theives our government have just sold our nuclear industry to. The road to hell is clearly paved with Browns intentions. EDF should now stand for Expect Dire Finances
Tim, Dundee, Scotland
The competition that we have in the UK energy market is a joke! We have an oligopoly where if one hikes prices so do all the others. What's the point in the regulator advising the public to shop around when there is so little real price difference between the suppliers?
Alistair, London,
Where else do you think they are going to get the money to buy British Energy? I know EDF is a mainly French state owned company, but surely you don't think the French taxpayers should have to pay to buy up Britain, when they can get the stupid British to pay on their behalf?
Bruce, London,
How does the cost of the EDF supply here in UK compare with the charges it makes in France. As it is majority French government owned, does this make a difference. We need some transparency.
ADAMS, BUCKHURST HILL, uk
20% increase.
Easy, we have sold our businesses to foreign companies who are milking us.
EDF, is short for Electricité De France - in effect a branch of the French government, who bought our previously British owned company.
Please check, how much does EDF charge their French customers ?
paul epps, twickenham, england
Legalised theft.
David Thijm, Stourbridge, UK
Given the recent drop in oil prices this is unacceptable and if Gordon Brown wants to show us he is listening he will immediately prohibit this increase otherwise, let us do what the French would do and bring EDF's UK operations to a complete halt.
A.Williams, Cradley Heath,
In the last week or so gas prices have fallen from $13.50 to $9.30 for a million Btu. This is equivalent to a fall from about 75p per therm to less than 50p a therm or about 1.6p per KwH.
When did the utility companies last reduce their prices by a third when the wholesale price has fallen?
Bob Y, Cardiff, GB