Green energy supplier Bulb has warned its 450,000 customers that it may be forced to increase prices for the third time this year, as a result of rising wholesale costs.
In its most recent ‘energy price watch’ review which it carries out every three months Bulb said that wholesale energy prices have increased by around 5% since June 2018. As a result, it says “there is a chance we’ll need to raise our prices in November”.
This would be the third price hike from Bulb this year, after announcing an increase in February by 2.8% due to an 11% rise in wholesale costs between July 2017 and February 2018 alongside a rise in Government policy costs.
In June, it announced an additional 5.1% increase, saying wholesale costs had gone up a further 21% between February and June 2018.
As Bulb has just one variable tariff known as Vari-Fair all its customers would be hit by the new hike. Currently, a typical user on this deal pays £923/year on average up £68 from the beginning of the year. However, it’s still well below the big six standard variable tariff, which costs a typical £1,213.
With wholesale energy prices what suppliers pay for gas and electricity continuing to rise, further hikes seem likely, and not just from Bulb.
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A rising market?
Price increases are a common theme of the energy market this year we’ve seen multiple price hikes from some of the big six suppliers, as well hikes from the medium-sized and smaller suppliers such as First Utility, Ovo, Co-op Energy, Tonik Energy, iSupplyEnergy, Utility Warehouse and Outfox the Market.
Last week, British Gas the largest supplier in the market hit customers on its standard variable tariff with a second hike this year, following in the footsteps of E.on and EDF.
We’ve also seen Ofgem raise the level of the energy price cap for prepay and vulnerable customers twice this year. Ofgem said this increase was down to higher wholesale gas and electricity costs, driven by rising global oil prices.
What does Bulb say?
In its latest update, Bulb said: “We last updated you in June, when we raised our prices as a result of increasing wholesale energy costs. In line with our price principles, we kept this increase as low as possible.
“Sadly, wholesale costs have gone up since June. They are now around 5% higher than they were. Without substantial falls in wholesale costs, there is a chance we’ll need to raise our prices in November. If we do, we’ll give our members 60 days’ notice. We don’t charge exit fees, so our members can leave at any time at zero cost.”