E.On to hike standard variable dual fuel prices by average 8.8%

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Energy supplier E.On is to increase its standard variable dual fuel prices by an average of 8.8% from April 26.

The energy giant said its standard electricity prices will increase by an average of 13.8% and standard gas prices will rise by an average of 3.8% "due in large part to increasing policy costs and other costs it doesn't control".

Around 2.5 million of E.On's residential customers - 62% - will "potentially" see an increase if they take no action before April 26, the company said.

E.On said the hike was "largely due" to an increase of around 36% in the cost of supporting various social and environmental programmes, such as the Renewables Obligation (RO) and Electricity Market Reform (EMR).

Tony Cocker, chief executive of E.On UK, said: "This is the first time since January 2014 that we have increased our standard variable prices.

"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 EMR, RO and the Energy Company Obligation (ECO), which are paid for via people's energy bills, are increasing.

"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."

He added: "We will continue to work to make sure our customers are on the best tariff for them; for example, we will be sending more than three million letters to customers this month with personalised savings messages making it clear how easy it is to swap to another tariff that might offer cheaper prices.

"In addition we will also be working to contact a number of potentially vulnerable customers currently on our standard variable tariff with a personalised quote for an exclusive product, which will be E.On's cheapest tariff."

E.On's announcement follows a spate of energy price rises in recent months.

Npower, EDF and Scottish Power are among those to have ramped up bills, with many blaming rising wholesale costs.

Co-operative Energy is also increasing the cost of its standard variable tariff by an average of 5%, a change that will affect around 96,000 customers when it comes in from April 1.