The UK may be enjoying a lengthy heatwave, but from French-owned company EDF Energy has hit customers the unpleasant news of a price hike.
These recent price increases will hit consumers harder than usual due to their coinciding with stagnating wages across the UK, leaving many struggling to pay their bills.
There are multiple factors which cause fluctuations of gas and electricity prices, such as availability, supply and demand, wholesale and transport costs and maintenance of infrastructure. Wholesale fuel prices have risen by 13% since April, proving that price increases can happen at any time. It is clear that wholesale costs are higher, for the suppliers right now than they have been in the past. However, in under three months EDF has increased prices twice and their standard tariff currently ranks the most expensive, leaving many unsympathetic to their justification.
EDF has said that 60% of their customers will not be affected by the unexpected hike, including vulnerable customers and those on fixed deals or prepay meters. However, this leaves a significant 40% of customers financially impacted by the hike.
In comparison to the other ‘big six’ suppliers the rise was relatively small, but a rise nonetheless results in customers experiencing a further hit financially. The energy firm stated that a major factor that contributed to the rise in prices was the arrival of the ‘Beast from the East’ storm, which reduced gas storage stocks last year and also lead to a continuing surge in oil prices.
The contrast between demand and supply for energy is one of the main factors which effects its price. Demand of course does not just come from domestic consumers, but across all industries and sectors, meaning storage stocks can be wiped out with unexpected weather conditions such as the ‘Beast from the East’.
EDF claims to have kept gas prices as low as possible for as long as they could. Managing Director Béatrice Bigois said: “We know that another price rise will not be welcome, and we had hoped that our limited changes, announced in April, would be enough. However, energy costs have continued to rise significantly and despite our best efforts to absorb some of these by reducing the costs within our control, sadly we can no longer sustain this.”