Increasing Electricity prices in UK

Electricity and Energy companies are increasing prices of Electricity and Energy one by one sparking fears that there will be an allround increase in prices next year too.  This has been compounded by the fact that 40% of UK’s power stations are Gas fed. An increase in prices of Gas has meant an increase in prices of Electricity and Energy too.

These increases also have meant that, Customers are switching their supply companies at an alarming rate. Nearly 2.8 million energy users switched power supply companies, looking for a better deal. This has also meant fierce competition between power supply companies to retain customers. To retain Customers, they obviously have had margin pressures.

Power companies are facing pressures on various fronts. The increasing operating costs, the ever fluctuating oil and gas prices, margin pressures on the retail and wholesale front. It is indeed increasingly becoming a challenge for the UK power supply companies to maintain profitability. This has forced the supply companies to have a relook at their pricing models for their customers. Overall it looks like the situation has entered a loop.

nPower has taken the first step by increasing the prices of Gas and electricity. The increase will be effective from Jan 1st 2008 onwards.

However, not everyone is happy. Consumer groups are taking a stand that supply companies need not pass their risks to customers and have promised a tooth and nail fight to prevent prices from increasing.

However an increase in the prices would certainly hit the consumer hard as he has already been bothered by rising prices of food and petrol, as well as deteriorating conditions in the credit and housing markets.