Powergen raises gas bills by 18.4%

Millions of households are facing higher costs after Powergen hiked energy bills by as much as 18.4%.

Powergen became the latest major supplier to impose increases in household bills when it said gas prices will go up by 18.4% and electricity by 9.7% on Monday.

The German-owned supplier blamed an 87% increase in the cost of buying wholesale energy to sell on to its customers in the UK since the beginning of last year.

Energywatch said an average Powergen gas bill was now £644 a year - up 107.5% since 2003 - while the average electricity bill was £333 - up 62.1%.

Energywatch director of campaigns Adam Scorer said: "With millions in fuel poverty, government and industry must come up with an effective strategy to protect those vulnerable customers most in need."

It came just two days after Powergen owner EON said profits at its UK arm plunged 26% because of the soaring cost of wholesale gas.

The fall in UK profits from £413 million to £304 million in the first six months of the year came despite an earlier inflation-busting hike in energy bills.

In March, Powergen - which has 8.5 million customer accounts in the UK - lifted the price of gas by 24.4% and electricity by 18.4%.

The move means that every major supplier in the UK has now imposed two rounds of price increases this year.

Powergen Retail managing director Nick Horler added: "We take today's announcement very seriously and we have fully considered its impact on our customers."