PrepayPower to increase cost of electricity and gas next month due to Middle East conflict

PAY-AS-YOU-go electricity and gas provider PrepayPower has announced that it will increase prices next month.

It pointed to the increase in wholesale costs arising from the conflict in the Middle East as the reason it has been “forced” to ramp up prices.

The increase will take effect from 1 June, and will see electricity costs rise by 8.8%, while gas will increase by 10.6% on the estimated annual electricity and gas bills.

For an average household, this will add an extra €168 per year for electricity and €171 for gas.

PrepayPower noted that this is the first price increase it has announced in three-and-a-half years and follows an eight-month winter price freeze that was announced last October.

It said the decision to freeze prices last October “shielded customers from higher costs during the period of peak energy usage” and came at a time “when most other suppliers raised their rates”.

A spokesperson pointed to “sustained instability in global energy markets, driven by the ongoing conflict in the Middle East” and remarked that this has “pushed wholesale energy costs significantly higher”.

“PrepayPower has absorbed these increases for as long as possible but can no longer delay the adjustment,” said the spokesperson.

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Eric Mullane, Managing Director of PrepayPower, today said the company has “worked hard to protect our customers from rising energy costs”.

However, he said “wholesale energy costs have continued to rise sharply, and 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,” said Mullane.

Daragh Cassidy of price comparison website Bonkers.ie today said that the increase “isn’t surprising”.

He, too, noted that when most energy suppliers hiked their electricity prices last autumn, PrepayPower, its sister company Yuno Energy, 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,” said Cassidy.

“But this was always unlikely to last indefinitely. And to be honest, I’m surprised the electricity hike wasn’t a bit bigger.”

Electric Ireland also announced a price freeze last autumn and Cassidy said he expects it to announce a similar hike in its electricity prices over the coming days or weeks.

Meanwhile, Cassidy remarked that wholesale gas prices are “highly volatile” and up “around 40 to 50% since the start of the renewed conflict in the Middle East and 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.”

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