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Ovo Energy has announced a 3 per cent price rise, just over a month after it reduced bills for consumers.
The independent energy supplier’s increase will affect new and renewing customers on the company’s Cheaper, Better and Greener energy plans.
The rise will see the typical dual fuel energy bill increase from £998 – which the supplier cut bills to last month – up to £1,028 per year.
Ovo Energy said the price rise was due to “an upward move in wholesale commodity costs in April, coupled with a small rise in the cost of supplying energy”.
Market data provider Platts reported last year that wholesale gas and power prices over the summer months of 2013 were markedly higher than the previous year.
The key reason for this was a long winter which caused gas storage to run dry in March, sparking a need for aggressive buying in preparation for the coming winter.
Over January 2013 the price for prompt-delivered electricity traded in line with levels seen at the same time the year before at £49.38/MWh, according to Platts reports.
But by March, Platts’ average price for prompt electricity showed an almost 35 per cent year-on-year hike to £61.79/MWh in March 2013.
Throughout the summer months prices remained more in line with typical winter prices than those seen in summers past, Platts data shows.
Ovo has cut its prices five times since September last year, and this is the first price increase since April 2013, when prices went up by 5.6 per cent.
The increase is a result of the company’s “cost reflexive pricing model”, where it monitors prices on a monthly basis and changes them to “reflect the natural movement of the cost of supplying energy”.
Stephen Fitzpatrick, managing director and founder of Ovo Energy, said: “No company ever likes to announce that they’ve got to put their prices up, especially when we work so hard at Ovo to keep them down.
“But we do need to be consistent and fair about the way that we price and that means ensuring prices reflect the natural movement of costs.
“I think our track record shows that whenever we can lower prices, we do.
“But unfortunately prices, and costs of supplying energy, can go up as well as down.”
The price increase will take effect at 00:01 on Thursday 15 May.
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