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.