Price increase on the cards and merger rumoured

Just when you thought the news in the gas and electricity market couldn’t get any worse...

According to a report in The Times, Eon, the German utility which previously operated in the UK under the name Powergen, is putting the final touches to a double digit price increase for it customers.

The official announcement could come within days and could have a major effect on the company’s 4.7m electricity customers and 2.7m gas customers across the UK. The pressure will be on Eon to freeze its online only deals so it can remain competitive with the British Gas Click Energy 4 product which remains the cheapest tariff for average consumption levels across the UK.

If Eon does hike its prices, its customers will become the latest to be hit with higher energy bills. British Gas, Npower and Scottish Power have all increased their gas and electricity charges in recent weeks.

Worst affected by the price hikes are those on their providers’ standard tariffs as these are the most expensive deals. If you have never switched energy provider and are paying the standard rate, then it is time to do something about it. You could save an average of £325 a year by switching to a cheaper tariff. Search now with our gas and electricity comparison tool.

There are further rumours in the energy markets about a potential merger between EDF of France and Iberdola of Spain. If it goes ahead this would mean that EDF Energy and Scottish Power, Britain’s fifth and sixth largest energy suppliers, would unite as Scottish Power is owned by Iberdola.

This in turn would make the new company Britain’s second largest energy supplier, just behind British Gas, with 10.7m customers.

If you’re an existing EDF Energy or Scottish Power customer you shouldn’t worry about how this is going to affect you just yet. The deal will be difficult to achieve due to impending elections in Spain – national governments are known to protect their national champions.

So for now it’s just speculation. Watch this space and we’ll keep you informed of any more developments.

DISCLAIMER: Please note that any rates or deals mentioned in this article applied at the time of writing and may no longer be available/applicable today.

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