An upward move in wholesale commodity costs in April, coupled with a small rise in the cost of supplying energy, has led OVO to announce its first price increase in over 12-months. After five consecutive price drops over the last year, the supplier will today increase its fixed energy tariff offer by 3%. The move will affect new and renewing customers only and will position OVO as the fourth cheapest energy supplier in the UK.
Following the increase, OVO’s price for a dual fuel customer* will be £1028 – over £158 (13%) cheaper than the standard Big Six tariffs. OVO’s renewing customers will still see lower prices, as the supplier remains seven per cent (£80) cheaper against its May 2013 rates. Over 82% of OVO’s customers will be protected against this increase until their 12 month fixed energy contract is up for renewal.
OVO reviews its prices on a monthly basis and this price change largely reflects movement in the cost of supplying energy to its customers over time. This ‘cost reflexive’ pricing sits at the heart of the company’s promise to customers that the deal they are getting from Ovo will always be fair, transparent and as competitive as possible. The company is committed to reducing its prices if its costs fall again in the future.
Stephen Fitzpatrick, Founder and MD at OVO commented:
“No company ever likes to announce that they’ve got to put their prices up, especially when we work so hard at OVO to keep them down. But we do need to be consistent and fair about way that we price and that means ensuring prices reflect the natural movement of costs. I think our track record shows that whenever we can lower prices, we do. But unfortunately prices, and the costs of supplying energy can go up as well as down.”
The rise takes effect at 00.01 on Thursday 15th May.
* Price is based on a dual fuel, UK average for a medium user (3200 kWh electricity, 13500 kWh gas) paying by monthly direct debit and are inclusive of VAT.
**OVO’s renewing customers are customers with 12-month fixed rate contracts coming to an end.
This is the first price increase for the supplier for over 12-months. OVO last raised its price on 11th April 2013 by 5.6%.
The five consecutive price drops are as follows:
Price change date
Average annual cost of medium dual fuel
The price increase is on OVO’s fixed Cheaper, Better and Greener energy plans.
OVO operates using a cost reflexive pricing model meaning the prices it charges directly reflect the natural movement of the cost of supplying energy. This means prices can go up as well as down.
Headquartered in Bristol, OVO Energy is one of the leading independent suppliers in the UK retail market. Since it entered the market in 2009, it’s grown to 331,000 customers, created 500 jobs and it’s currently recruiting for 40 more.
OVO’s guiding principles are simplicity, transparency and fairness in all of its operations: make the energy industry easier for consumers to understand and make sure prices reflect the actual cost of doing business so customers know they’re getting a good deal.