UK Pays Less Than European Average For Gas and Electricity Despite Energy Price Rises
21st October 2013 13:25 - Utilities
Npower this morning became the third of the Big Six energy giants to increase the cost of bills. The company announced that it is raising gas prices by 11.1% and electricity by 9.3% - an average of 10.4%. The increase will affect some 3.1 million customers.
Npower’s move follows announcements from rivals British Gas and SSE, who are set to increase prices by 9.2% and 8.2% respectively.
According to Ofgem, the average annual dual-fuel bill – covering gas and electricity – is £1,315 per household. This figure is based on the latest assumption of the amount of energy a typical household uses.
Price increases, based on the average figure provided by Ofgem would suggest that Npower’s dual-fuel bill would cost an extra £136.76 per year, SSE £107.83 per year, and British Gas £120.98 per year.
Still, it should be remembered that this is an average. The actual amount that any household would spend on depends on energy consumption and can also be affected by the method of payment.
It is one of the largest regular bills that a household has to pay, behind mortgage or rent, and council tax. Prices have risen in recent years, and analysts predict another increase in the coming weeks.
However, despite the coverage of the price rises in numerous news outlets and newspapers, figures show that last year the average domestic electricity cost in the UK (including taxes) was the fourth lowest among fifteen EU countries, and only the fourth highest among the G7 group of nations. Domestic gas prices in 2012 were the second lowest among the EU countries, and third lowest in the G7.
The latest statistics from mid-September - provided by Ofgem - show that the average profit margin made on a £1,315 bill is £65. This was £30 higher than in September 2011 and September 2012. However, in some cases, profit margin figures are known to have risen above £100, whereas in others the margin has been negative. Spokesman for some of the Utilities companies have stated that they aim to make around 5 pence profit on the pound.
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