Npower Raises Prices by 10.4% months after profits rose by 25%

Today held a lovely bit of news for Npower customers to wake up to on this drizzly UK morning. Npower – one of the big 6 UK energy companies – has decided to raise the overall cost of supplying gas & electricity to its UK customers by a whopping 10.4%. It comes just days after similar rises from the likes of SSE and British Gas. 

Now we all know that the cost of almost everything has risen across the board recently and I’ve never had a problem with a reasonable price increase. The problem with the rises being imposed by UK energy firms is that they seem to be coming around thick and fast at the moment and never are they at a level that can be deemed reasonable. As a consumer you can’t help but feel that the recent political argument surrounding a long-term cap on energy prices has in some way played into these rises and it really doesn’t seem fair that already struggling households and consumers are falling victim to these games.

Npower claims its profit margin sits at around 5% but when in March of this year it announced that profits had risen by 25% – Just months after another big price rise – you have to wonder whether some inventive accounting is being employed by the big 6 energy firms to hide the true profit margins on energy supplies.

Which brings me to a point that has enraged me for years. How on earth can energy companies justify huge rises in energy prices when their profit margins are increasing so much and also, where will it end? I understand that these companies are money-making organisations and that they have shareholders to please but doesn’t there have to be some sort of moral responsibility too? I also understand that some money needs to be held back to help rebuild Britain’s aging power stations but surely there are better solutions to this problem than placing the cost full and square onto the backs of cash strapped consumers and if it is the case that there is no better option, perhaps a detailed breakdown of how much needs to be raised, over what period of time and also how much of this cost is being borne by the energy companies themselves should be considered to give customers a clearer idea of what’s going on rather than us just having to take the word of energy companies whom we don’t hold much trust for anyway.

On the point of how much of the cost of rebuilding Britain’s energy infrastructure should be borne by suppliers and not consumers I would say this. I have been self-employed for several years and throughout that whole time I have always ensured that my pricing structure has allowed for the need to replace and repair equipment necessary to maintain my business operations. I certainly don’t go out spending all my profits for years on end revelling in the good times only to have to go back cap in hand to my customers when I need some new machinery or a new vehicle. Business just doesn’t work like that. Fair enough if costs to wholesale supplies are “genuinely” increasing then I have no problem with these costs being passed on. If the issue is purely of business maintenance though then this should have been accounted for years ago, not put off until the last-minute and placed squarely on the shoulders of cash strapped consumers who are struggling to get by whilst energy firms make ever-increasing profits.

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6 Responses to Npower Raises Prices by 10.4% months after profits rose by 25%

  1. Don’t forget the ever increasing green energy levy which is going towards otherwise unviable renewables such as small scale hydro. The massive feed in tariffs on small scale solar and wind farms which are now using diesel motors to turn the turbines during periods of calm.
    My British Gas bill has risen from £40 a month to £89 a month over the last 7 years!!!
    getrichwithme recently posted..War On Utility BillsMy Profile

  2. moneystepper says:

    I’m not sure I can remember the last time that this wasn’t a headline!! Prices seem to be destroying inflation. People often say “well, at least the shareholders will be happy”.

    British gas bills went up 9% again this year. However, Centrica (BG owner) is up around 0.5% per year in this time. So, who is making the money?

    I would guess its the government and the executives..
    moneystepper recently posted..Free online giveaways – pros and cons of hosting competitionsMy Profile

    • Adam Buller says:

      The figures just don’t seem to add up do they. I was going to put a line in there about the prices rising more often then US debt ceiling but I think we over-killed that topic last week :-)

  3. I’m not enjoying all this news about energy providers at the moment. Like you say, it’s one after the other at the moment with increasing costs. I’m dreading the Winter season because we just can’t afford to have our heating on as much as we’d like.

    I’m with the Utility Warehouse who increased their charges slightly last year but I think they are still the cheapest because I also have my phone and broadband with them (the more services you take, the cheaper it is). It’s definitely worth shopping around – First Utility is a provider who are advertising good deals right now.
    Hayley @ A Disease Called Debt recently posted..Keep Calm and Carry On! Part 1My Profile

    • Adam Buller says:

      Yeah I’ve seen some good deals from First Utility recently, our fixed period comes to an end soon and I’m not looking forward to the price jump. There must be some sort of price fixing going on for them all to be doing it at the same time, I’m sure they’d say it’s just market forces but I’d guess there’s more to it than that.

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