Blog Post

Gas and Electricity Bills to increase for over a million Bulb Customers due to rising Wholesale Energy Prices

Richard Simmonds • May 25, 2021

Energy supplier Bulb is to hike energy bills for 1.7 million of its customers in June, making it the second time the company has raised prices in 2021.

A second price hike

Bulb is raising the price of its standard credit tariff by £69 per year on average from June and will also be raising prices for households paying by direct debit on its Vari-Fair tariff from the 21^st. Prepaying customers will see no change in energy bill prices.

In March, Bulb hiked prices by £91 per year and is blaming a rise in wholesale energy costs for the need to increase energy bill prices.

The new hike puts Bulb’s new prices just £12 below the price cap set by Ofgem if a customer pays via direct debit. According to price comparison websites consumers can save up to £281 per year by switching to another energy supplier.

A Bulb spokesperson said: "Wholesale energy prices have doubled since this time last year and are up by a third since March. We therefore need to increase our prices by around £1.33 per week for a typical member. They'll still be below the price cap. We pass on cost savings when the cost of supplying energy falls, so when it drops by more than £20 per year, so will our prices."

These price hikes are unlikely to slow Bulb’s momentum after it was recently named as Europe’s fastest growing company by the Financial Times newspaper. It’s also seen its revenues soar by 1,159% between 2016 and 2019. Its customer base has also grown rapidly with it rising from 200,000 in 2017 to over 2 million in 2021.

Also read: How should Energy Suppliers explain Energy Bill Increases?

What’s caused the rise in Wholesale prices?

Wholesale energy prices have risen by 29% since March due to a combination of factors created by adverse weather conditions creating a surge in demand for gas, increased energy demand as a result of the easing of Covid-19 restrictions on businesses and industry as well as the drive towards greener energy.

In January, gas supply came under pressure from a long period of very cold weather which resulted in rising prices. Periods of low wind also resulted in wind turbines losing their productivity for an extended run in March which in turn resulted in energy companies having to resort to alternative sources of generation.

The wettest and coldest May for a long time is also likely to play its part on putting further upward pressure on energy prices as we enter the summer months.

Also read: Number of consumers switching energy supplier soars after Ofgem Energy Price cap rise

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