Scottish & Southern Energy (SSE) revealed that they felt gas and electricity prices could rise sharply this year, the second energy provider to utter those ominous words.
Despite making pre-tax profits of 29% in the past year, a massive £2.1billion, they revealed that their household gas business had actually lost money, explaining that last years 9% rise to customers wasn’t enough to eat up the 25% increase in wholesale gas costs.
The firm warned that since the end of their financial year, wholesale gas and electricity prices had risen by as much as 33%, explaining, “Forward annual wholesale prices for electricity and gas have risen by around one quarter and around one third respectively in the six months following SSE’s 29 October 2010 announcement of a price increase for household gas supply,”
Their announcement came in the same month that British Gas owners, Centrica also warned that customers may have to start paying more for their energy in the near future.
Centrica also claimed that the “end-user prices” were not reflecting the price that British Gas were paying for their wholesale gas, and that such prices were not sustainable for much longer.
The Bank of England have also warned that they can foresee an increase in energy prices in the latter parts of this year, leading to worry from Consumer Focus.
Consumer Focuses Audrey Gallagher explained, “Hard-pressed consumers will be grinding their teeth in frustration as the second of the Big Six hints at price rises while reporting increased profits.”
“Customers simply don’t have faith that they are being asked to pay a fair price and Ofgem has shown this lack of trust has firm foundations,” she added.