Gas and electricity price battle lines drawn

Energy company E.On has promised that it will not increase UK residential energy prices this year amid hints of rising costs in the winter.

The announcement comes as price competition starts to pick up between the major energy suppliers.

On Friday, Centrica - the owner of British Gas - suggested that bills could increase for customers this winter.

All major companies have cut their tariffs in recent months.

Tony Cocker, chief executive of E.On UK, said the promise was an aim to be fair to customers.

"Unfortunately global energy markets are expected to see an overall trend of rising wholesale prices but as a company we believe in acting fairly, which means cutting prices when we can and never raising prices unless absolutely necessary," he said.

The promise still gives E.On room to raise prices at the start of 2013, which would mean higher costs for customers for much of the cold season.

On Friday, Centrica said gas costs would be 15% higher next winter, while other costs would add another £50 to the cost of supplying energy to the average home.

Consumer groups have urged all suppliers to hold back on any price rises for as long as possible, and to ensure that if they do move it is only in response to a sustained upward trend in costs.

Companies announced that they were cutting their gas or electricity tariffs by about 5% during the first three months of the year.

However, this came after price rises of up to 19% the previous autumn.

Richard Lloyd, executive director at Which?, said: "People tell us that rising energy bills are their biggest financial worry so anything that gives people more certainty can only be a good thing when household budgets are stretched."

G=Gas. E=Electricity

Nov 2010

G:2% E:8.9%

Dec

G:9.4%

G:7% E:7%

Jan 2011

G: 5.1% E: 5.1%

Feb

G:3% E:9%

Mar

G:6.5% E:7.5%

Aug

G:19% E:10%

G:18% E:16%

Sept

G:18% E:11%

G:18% E:11%

Oct

G:15.7% E:7.2%

Nov

G:15.4% E:4.5%

Jan 2012

E: -5%

Feb

G: -5%

G: -5%

E: -6%

G: -5%

Mar

G: -4.5%