UPDATE 1-E.ON UK to raise power, gas prices from Jan. 18

Mon Dec 10, 2012 6:53am EST

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LONDON Dec 10 (Reuters) - UK energy supplier E.ON on Monday became the last of the country's largest six utilities to raise energy prices for this winter, blaming wholesale, transmission and social scheme costs.

From Jan. 18, its average electricity prices will rise by 7.7 percent and its gas prices by 9.4 percent, E.ON UK said. It had pledged to customers in May not to increase bills this year.

"Some 16 months after our last price increase and almost a year since we actually cut our electricity prices, we have had to make the difficult decision to increase our prices," Tony Cocker, E.ON UK chief executive said in a statement.

Britons see climbing energy prices as the biggest threat to their standard of living over the coming year, according to a YouGov survey published in October, and UK inflation is already set to rise further this year due to recent gas and electricity price hikes by energy suppliers.

E.ON follows its competitors in raising prices, and all of them cited higher costs for things out of their power such as commodity prices, network tariffs and government-imposed social schemes.

Britain's utilities are often accused by the public and politicians of reaping huge profits from supplying energy to households at unrealistic prices.

The government last month announced plans to force utilities to give all customers the lowest tariff they can offer.

Cocker said E.ON's profit margin on supplying domestic energy was lower than 2 percent last year.

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