Cost of electricity and gas to rise as PrepayPower announces price hikes

The energy provider, which has 240,000 customer accounts, said conflict in the Middle East has forced it to raise its prices

From June 1, the average household will pay an additional €3.23 per week for electricity and €3.28 for gas.

Pay-As-You-Go electricity and gas provider PrepayPower is to increase its electricity prices by 8.8% and its gas prices by 10.6% for customers from the beginning of next month.

The energy provider, which has 240,000 customer accounts, said on Friday that rising wholesale energy costs arising from the conflict in the Middle East has forced it to raise its prices. 

From June 1, the average household will pay an additional €3.23 per week for electricity and €3.28 for gas.

The company said the hike marks the first price increase by the company in over three years and follows an eight-month winter price freeze announced last October to shield customers from higher costs during the period of peak energy usage, at a time when most other suppliers raised their rates.

"Sustained instability in global energy markets, driven by the ongoing conflict in the Middle East, has pushed wholesale energy costs significantly higher," the energy provider said. 

"PrepayPower has absorbed these increases for as long as possible but says it can no longer delay the adjustment."

Managing director Eric Mullane added that the company has "worked hard" to protect customers but that wholesale energy costs have continued to rise sharply.

"It is simply not possible to hold out indefinitely. We will continue to do everything we can to minimise the impact on our customers and to help them control their energy costs.”

Speaking on the latest price rise, Daragh Cassidy of Bonkers.ie said the move was not surprising, noting: "Last autumn, most of the energy suppliers hiked their electricity prices by between 10-15% as a result of continued high wholesale electricity costs and an increase in grid and network charges. 

'Similar move' from Electric Ireland expected

"However, PrepayPower, its sister company Yuno Energy, and Electric Ireland all announced a “price freeze” for the winter months.

"This meant that up until now, these suppliers’ electricity prices were around 20% cheaper than the rest of the market. But this was always unlikely to last indefinitely. And to be honest, I’m surprised the electricity hike wasn’t a bit bigger."

Mr Cassidy said he also expects a similar move from Electric Ireland over the coming days or weeks. 

"As for gas, wholesale prices are highly volatile, but they’re up around 40-50% since the start of the renewed conflict in the Middle East and are around three times the level they were at before the war in Ukraine broke out. 

"Unfortunately, this was always likely to lead to a hike in gas bills eventually, and most of the other suppliers will probably follow with a similar hike over the coming weeks."

PrepayPower said its customers can manage the impact of the increase through the company's app, which provides real-time usage tracking, daily spend visibility, and top-up.

Once the hikes are implemented, prices standard unit rates for PrepayPower's classic pay standard 24 hour urban electricity rates will be 37.62c, with its gas standard rates rising to 12.89c. The provider's standing charges will remain unchanged.