Squeeze on families as fuel energy and food bills rise
RISING household bills are putting more pressure on family budgets as fuel and energy price hikes threaten more financial misery for millions.
Energy giant Npower yesterday became the latest of the “Big Six” to ramp up bills, leaving a million customers facing a 5.3 per cent increase next month.
But analysts at the Bank of America also fear oil could cost $100 a barrel again next year, with campaign group Fair Fuel UK predicting the price surge within three or four months. Experts told
EXCLUSIVE
the Daily Express that for $2 increase in the crude oil petrol prices rise by 1p.
This means if oil prices reach $100 from their current level of $77.40, motorists will face average prices of £1.40 per litre. Petrol and diesel prices are already at their highest since December 2014, with petrol costing, on average, £1.24 and diesel £1.27.
And Office for National Statistics every price, figures for March revealed food prices rose by three per cent in the past year.
Howard Cox, co-founder of Fair Fuel UK, said: “We know it is going to escalate over the next three or four months.
“There will be massive implications at the pumps. We are looking at prices going up to £1.35, £1.40.
“There will some optimistic profiteering from wholesalers who are looking to take advantage of events in the Middle East.
“The wholesale price is going to go up, but the price on the forecourt is going to go up even more.”
Luke Bosdet, spokesman for the AA, said: “This hundred dollar a barrel prediction is exactly what we saw in 2008 when speculators in the oil market drove up the price to make huge profits at the expense of motorists.
“Some had to choose between eating properly and being able to afford to fill up their car to drive to work. It’s frightening, absolutely frightening.
“It’s already putting the squeeze on workers who need their car and are facing higher domestic energy bills, higher pension contributions and higher food bills.”
Bank of America analysts have warned that if OPEC and Russia do not stop withholding barrels, prices will rise.
They said: “Looking into the next 18 months, we expect global oil supply and demand balances to tighten driven by the ongoing collapse in Venezuelan output.
“In addition, there are downside risks to Iranian crude oil exports.
“Plus we see a high likelihood of OPEC working with Russia in 2019 to set a floor on oil prices.”
Struggling
An earlier report by JCB Energy said a dramatic fall in Iran’s exports makes “the probability of a strong bull run in crude markets – potentially even flirting with triple digits – near certain”.
Gillian Guy, chief executive at Citizens Advice, said: “At a time when many energy customers are struggling with their bills, this Npower price rise will be hard to stomach for the one million customers affected.
“The price rise won’t affect customers who have switched to a fixed rate deal. But our research shows that vulnerable customers, including the elderly and people with mental health problems, are among those least likely to switch.
“This means that many vulnerable customers could be disproportionately affected by this hike.
“Price increases only add to the pressure faced by those families who are already struggling to manage their household budgets.
“We know many people have to borrow just to cover their day-today bills. While this can help them manage their budgets, consumers should be protected so they don’t end up in a spiral of debt that has damaging knock-on effects.”
The Npower price hike will come into effect on June 17.
British Gas is increasing prices by 5.5 per cent from May 29, while Scottish Power is raising prices by 5.5 per cent on June 1.
More than 4 million customers will be affected by the British Gas price rise, adding an average £60 to bills. Scottish Power is increasing prices by 5.5 per cent – £63 on average, while EDF will see 1.2 million pay £16 more on average.
Alex Neill, Which? managing director of home products and services, said: “Npower already has the most expensive standard tariff available and has come bottom in our satisfaction survey for the eighth year in a row.
“This further price increase will leave customers questioning why they’re paying even more for their gas and electricity.
“Npower’s customers looking to avoid the price rise should look to switch immediately, as they could be saving up to £433 a year.”
Npower’s domestic markets managing director, Simon Stacey, said: “While existing customers who are currently on a fixed deal, have a prepayment meter or on the Safeguard tariff are protected from these increases, we encourage any customer who is struggling with their energy bills to contact us.”