Warning after new price rise

DRAMATIC energy price hikes will force more people into debt problems, a credit union boss warns today.Simon Pain, manager of Ipswich and Suffolk Credit Union, said the decision by British Gas' decision to raise power prices by 15 per cent was “crazy”.

DRAMATIC energy price hikes will force more people into debt problems, a credit union boss warns today.

Simon Pain, manager of Ipswich and Suffolk Credit Union, said the decision by British Gas' decision to raise power prices by 15 per cent was “crazy”.

The Centrica-owned supplier, which provides gas and electricity, announced an immediate rise on Friday, the same day that an inflation-busting EDF Energy prise rise kicked in and a week after an npower price hike was announced.

Mr Pain said the flurry of energy price rises - justified by the firms because of rising wholesale and transport costs - would lead to more people seeking financial help from the credit union.

“Energy is an obvious and necessary expense at this time of year. Gone are the days of 50 pence pieces going in the meter.

“A 15pc rise is more than people would expect - it is crazy for what is an essential part of people's day-to-day lives.”

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British Gas defended the rises by saying that higher wholesale prices of oil and gas had forced the move and that the increases wouldn't apply to those hardest-up.

Phil Bentley, managing director of the firm, which is Britain's biggest buyer of gas, said: “Lower availability of supplies from both here and the continent, coupled with higher global oil prices, have forced up wholesale prices.

“We can't absorb the burden of these higher energy prices and the costs of delivering a cleaner environment.

“We are investing in further lowering our carbon emissions. However, this also comes at an increasing cost for all. Ultimately, the best way of reducing energy bills is to make our homes more energy efficient.”

The increase will be delayed until March 1 for around 340,000 vulnerable customers on British Gas' Essentials tariff and 2.4 million customers on fixed-term tariffs will receive no increase at all.

It will also offer a new fixed price product available to offer price certainty for customers and pointed to the fact that it was the first energy supplier to offer free insulation to anyone over 70-years-old.

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Energy supplier nPower announced above-average price rises for Ipswich customers last week, even though most of Britain's gas comes into the country in nearby Norfolk.

Bill-payers here, part of the Eastern region along London and the East Midlands, face increases of 23per cent for gas and 17pc for electricity, although npower is raising gas prices for 4.1million customers by an average of 17 pc and electricity costs by 12.7pc.

The company says this is due to greater regional costs for distribution and infrastructure but most of Britain's gas arrives here through the huge Bacton terminal between Cromer and Great Yarmouth on the Norfolk coast.

And bosses at Sizewell B regularly say that it provides electricity for all the homes and businesses in East Anglia.

nPower says higher increases in certain regions increases have been levied to cover additional costs including maintaining pylon and pipe networks and will not apply to those customers its social tariff, which can include vulnerable or less well off people.

Prices rises by EDF Energy came into force last week, with gas going up by 12.9 pc and electricity by 7.9 pc.