Thousands of Scots could be plunged into fuel poverty this winter after Scottish and Southern Energy became the first supplier to announce a massive hike in gas prices.
The company, which supplies gas to 400,000 Scots and 3.6 million people across the country, will raise prices by 9.4% from December 1.
SSE claimed the price rise is unavoidable, although wholesale gas prices are now 40% less than at their peak two years ago.
By comparison, domestic gas prices are just 2% less than they were in 2008.
An Age Scotland spokesman warned the massive price hike could plunge thousands more elderly Scots into fuel poverty where they are forced to spend more than 10% of their income on heating their homes and that other suppliers are likely to raise prices by similar levels soon.
Age Scotland was formed by the merger of Age Concern and Help the Aged.Very disappointing”It is very disappointing news,” he said. “It is likely that other suppliers will follow suit as that tends to be what happens.
“More people will end up in fuel poverty. We would advise people to shop around to make sure they are now getting the best price for gas they can.”
Scottish and Southern Energy said that, from December 1, it will introduce a “No disconnection” policy for customers over the winter.
“That is very magnanimous of them to say that nobody will be cut off over the winter but it will still leave people struggling pensions are not going to go up by 9.4%,” said the Age Scotland spokesman.
It is estimated that around five million UK households are in fuel poverty.
Gas and electricity prices have soared in the past few years but Alistair Phillips-Davies, SSE’s energy supply director, said the rise is unavoidable.
He said, “The last few months have been marked by rising wholesale gas prices and, having absorbed losses in our gas supply business for some time, we cannot delay an increase in retail prices any longer. I am sorry it will take effect during the winter period.
“The last few years have, however, shown the value of work on energy efficiency and of help for vulnerable customers and we will continue to give priority to both of these things.
“SSE’s support for vulnerable customers will rise to £27m this year and reach more people than ever before, with around 150,000 customers benefiting from SSE’s packages of support.Modernising”At the same time, we have to sustain investment in modernising Britain’s energy infrastructure.
“In the last two years, SSE’s group capital investment has exceeded its profit after tax and it will be the same again this year.
“Amongst other things, this investment will deliver secure, lower carbon sources of energy.
“It will reduce our dependence on gas and make households less exposed to wholesale prices in the future.”
Mark Todd, director of Energy Helpline, said other suppliers will soon follow suit.
“This is a grim Christmas present for millions of customers before what’s predicted to be a very harsh winter,” he said.
“We expect there to be a response from the other suppliers, and it’s likely there will be at least a few that move before Christmas.”
Audrey Gallacher, head of energy at watchdog Consumer Focus, said, “We are worried this could be the start of some serious bad news for all consumers.”
Scottish Gas refused to say if it is planning a similar price rise.
Ofgem has forecast that wholesale gas prices will rise by a further 13% by the spring.
Dundee City Council’s social work and health convener, Jim Barrie, and Dundee Pensioners’ Forum secretary Gordon Samson branded the rise as a major concern for people on low incomes.
Photo used under Creative Commons licence courtesy Flickr user C.K.H.