Energy blow as Ovo raises prices

Today's news, which comes two months after a raft of price drop announcements, has fuelled fears more hard-pressed households may be hit in the pocket once again.

The jump will see Ovo's 10,000 customers on a variable rate tariff pay a typical 6.2% more for dual fuel from 3 May, taking an annual bill for a typical household to £1,190.

Ovo's existing 80,000 customers on a fixed deal won't see rises due to the nature of their product.

But if they renew onto a variable rate, which is the default option, they will pay the new, increased cost.

The price of fixes for new customers and those who renew onto a fix rises today by 7.7% for dual fuel, taking the price for a typical household to £1,140.

Ovo's electricity-only fixed deal also jumps by 3%.

The company blames the rising cost it pays for gas and electricity for the increase.

Its managing director Stephen Fitzpatrick says: "We buy our energy a year in advance and due to recent sustained increases in wholesale prices, our prices now need to go up."

All the big six energy firms — British Gas, EDF, Eon, Npower, Scottish & Southern and Scottish Power — announced in January they would reduce either their gas or electricity prices, not both, by a typical 5%.

Most of those falls have come into force already, though Scottish & Southern's drop only happens on 26 March. However, the reductions failed to get anywhere near reversing the up-to-19% jumps for gas and electricity imposed last year.