MONEY COMMENT
When Prices Go Up, Switch

By Jane Mack (TMFJane)
January 7, 2004

The next time you get a gas or electricity bill you might find it's for rather more than you were expecting. And it won't be because you've treated yourself to an extra degree or two of heat over the Christmas break.

On Monday, the energy supplier, Powergen, increased its prices by an average of 6.9% for electricity and 4.9% for gas. The price rise will put £17.25 on the average annual electricity bill of £250 and £17.50 on the average annual gas bill of £350.

And this weekend, British Gas will follow suit by increasing both its gas and electricity prices by 5.9%. They say it's because wholesale energy costs have risen since the summer and they're still going up.

It hasn't pleased the consumer watchdog, energywatch, who point out that wholesale energy prices dropped quite significantly in previous years but the consumer didn't benefit from those reductions at the time. They say it's grossly unfair that consumers are having to pay more now.

The only thing you can do is to make sure you're paying the cheapest prices possible. Energywatch estimates that consumers can save up to £1 billion a year by switching suppliers but only one third have made the change. If you haven't looked at doing so perhaps now is the time.

You can read more about switching at energywatch and industry regulator Ofgem. You can also compare prices at uswitch.com, a Fool partner.