E.ON has become the latest of Britain's "Big Six" energy providers to hike prices, after revealing on Tuesday (7 March) that it will increase its dual fuel standard variable tariffs by 8.8% from April.
The German company said the move will affect approximately 2.5 million consumers, accounting for 62% of its total household customers, and was motivated by increasing costs related to the UK's social and environmental schemes.
The price hike, which will become effective on 26 April, will see electricity prices will rise by an average of 13.8%, and gas prices by 3.8%. The decision is expected to draw criticism from customers, although E.ON stressed it was the first time in three years its prices have increased and added it would send out letters to its more than three million customers to highlight cheaper tariffs are available.
Additionally, the company also plans to offer special deals to some vulnerable customers – including those aged 65 or over – which will allow them to opt for a cheaper tariff before the planned price hike becomes effective.
"It is an announcement we never want to make but is due in large part to the fact that many of the costs we don't directly control, such as policies including the Energy Company Obligation, which are paid for via people's energy bills, are increasing," said Tony Cocker, chief executive of E.ON UK.
"We have been able to partially offset some of these rises through our wholesale hedging policy and other means, but we do have to make an increase."
Last month, British Gas, one of the "Big Six" energy providers in the UK, unveiled plans to extend its price-freeze until August this year, after managing to "significantly" reduce its own costs. That came after nPower announced it will hike prices by nearly 10% from 16 March, with approximately half of its 1.4 million customers set to be affected.
Scottish Power said standard electricity prices will increase by an average of 10.8% and gas prices by 4.7% on 31 March, while EDF Energy's electricity prices rose by 8.4% last week, even though the company cut its gas prices by 5.2% in January.
Hannah Maundrell, of Money.co.uk said the "unfair" price hike was yet another huge blow to families who are struggling to make ends meet.
"With energy prices shooting skyward and cheap deals being pulled, the harsh reality is you don't have time to lose – you must look at your bills now and work out whether or not switching could save you a bundle," she added.
"If you're an E.ON customer, you need to check if you're on their standard variable tariff ASAP then compare your options and switch to a different tariff that saves you money and protects you against future price increases."