Millions face bill rise of £200 a year as energy giant EDF announces 22% price hike

Millions face paying an extra £200 annually for heat and light after power giant EDF announced an immediate price rise.
 
Gas tariffs will rise by 22 per cent and electricity by 17 per cent for the company's 5.5million customers - taking £1.1billion a year out of their pockets.
 
The move is expected to usher in a raft of price rises by the 'big six' power companies.

Some analysts believe that prices could rise as much as 40 per cent before Christmas.

That would drain £10.4billion a year from consumers already being squeezed by rising costs.

Charities fear that many elderly people may go hungry this winter if they are to pay the cost of staying warm.

Director-general of Age Concern Gordon Lishman said: 'News of yet more huge hikes in energy prices will horrify many pensioners who are already struggling to pay their rapidly rising household bills.'
 
The price rises come at a time when power firms are under fire for poor service, inaccurate bills and imposing higher tariffs on the poor.

Customers with prepayment meters pay higher tariffs than those who use direct debit.

EDF and the other suppliers claim that spiralling wholesale gas prices are to blame.

The increase has been driven by what consumer groups and economists have condemned as a 'toxic' link to the rising price of oil.

At the same time, there are fears that foreign-based oil and gas producers are holding the UK to ransom by rationing gas supplies to increase profits.

The hardship being felt by millions will increase pressure on the Government to impose a windfall tax on energy producers, particularly the likes of BP, Shell and the BG Group.

This week the oil production and exploration company, BG Group, which is separate from British Gas, reported profits in the past three months rose 92 per cent to £1.4billion.

However around 4.5million households are in 'fuel poverty', meaning they have to spend more than ten per cent of disposable income on heat and light. Half are pensioners.

Mr Lishman said urgent action is needed to help the elderly survive this winter.

'Companies should be working together to offer "fuel vouchers" to the poorest pensioners,' he said.

The price rise at EDF was brought in with immediate effect from yesterday.

Adam Scorer, of consumer group Energywatch, said: 'If EDF's fellow energy suppliers follow suit then fuel poverty will be visiting more than one million new households.'

The organisation believes the link between the price of oil and gas may be illegal under EU law and should be dismantled.

Britain's two biggest energy suppliers, British Gas and Scottish & Southern Energy, have both signalled major price rises are in the pipeline.

The four other major energy companies are foreign-owned. In many cases their parent companies are enjoying a profits bonanza because they also produce gas and electricity.

For example, nPower is owned by RWE of Germany, and EDF is a French power supplier.

The annual average household bill with EDF rose from £907 in January to £1,007. It will now rise to £1,211-an increase of 33.5 per cent or £304 since the beginning of the year.

Ann Robinson, director of consumer policy at price comparison firm uSwitch.com, said: 'We are in danger of seeing household energy becoming unaffordable for growing swathes of society.'

EDF said it would soften the blow by increasing the number of poor households who qualify for lower bills through its 'Energy Assist' scheme.

The company said wholesale energy prices had increased by 70 per cent for coal, 63 per cent for gas and 47 per cent for electricity since it last increased its prices in January.

EDF chief, Eva Eisenschimmel said: 'We have been absorbing some of these costs in recent months, but we now have to pass on some of the resulting rise in wholesale costs to our customers.'