DAN HYDE: Wholesale energy prices are lower than they were three years ago - so why is Npower raising bills?

Published: 17:01 EST, 7 February 2017 | Updated: 04:14 EST, 8 February 2017

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Cast your mind back to November and you may recall reading in Money Mail that power suppliers were planning to announce electricity price rises of 10 per cent in January.

Well, we didn't miss the mark by much. Npower is raising bills by an even bigger 15 per cent, while putting gas up 4.8 per cent for good measure.

And the increases were made public on February 3 — a few days later than expected.

The power giants will grab any excuse to squeeze more from us, so you can expect rival suppliers to follow suit.

Shameless: Npower is raising bills by an even bigger 15 per cent, while putting gas up 4.8 per cent for good measure

If this all feels like groundhog day then you will be pleased to hear of a twist in the tale this time.

Unlike previous years, everyone — from Npower's former chief executive Paul Massara and the Prime Minister to the energy regulator Ofgem and comparison sites that earn a fortune by flogging cheap tariffs — agrees these latest hikes are completely unjustified.

Npower is mostly blaming the higher cost of buying fuel on the wholesale markets.

Even after recent rises, however, wholesale prices are 18 per cent lower than they were three years ago, while Npower's average bill is 4 per cent higher (£1,187 compared to £1,142 in January 2014). On that basis, it should be cutting its energy prices, rather than increasing them again.

Npower also says it is grappling with costly Government energy policies, green taxes and smart meters. Yet experts say the cost to suppliers of keeping the lights on next winter will be a fraction of what it was this year.

Meanwhile, the Government is actually cutting subsidies for solar power and wind farms, not increasing them.

I would hate to think that the £12 billion installation of smart meters in every home is what is really driving up bills. As we explain today, in future these meters will let you pay less when it rains and buy energy in advance.

However, while they might reduce errors and help us to save energy, the wacky new tariffs will also make it more likely that we will end up on the wrong deal and paying over the odds for gas and electricity.

It might be better if the likes of Npower were instead made to focus on improving customer service and offering fairer prices, but ministers seem set on everyone having a smart meter by 2020.

So if we don't get a U-turn on that, the Government must ensure the burden of rolling out these devices is shared more evenly.

At the moment, energy suppliers try to shift any extra costs to their loyal customers on standard variable tariffs.

That allows firms to lure customers from rivals with cheap offers and quirky new tariffs and still make a tidy profit. We are all being exploited, plain and simple, and Prime Minister Theresa May must step in and put a stop to it.

Brave move

What super stuff from Coventry Building Society.

It takes a lot of guts for a company to stick its head above the parapet and make a bold change that actually benefits the customer when your rivals are not doing the same.

Now when you log on to your Coventry savings account, you will see in pounds and pence how the interest compares to the best deals available elsewhere.

Wholesale energy prices are lower than they were three years ago, so why are prices rising?

This honesty policy was dreamt up by the Financial Conduct Authority, but the toothless watchdog stopped short of making it obligatory because the banks' lobbyists said it could not work.

Well, Coventry has shown they were talking rubbish.

This leads to only one conclusion: the real reason banks won't come clean is the fear that savers will suddenly realise just how little the company cares about them.

Badmiral

A few weeks ago, Money Mail deputy editor Victoria Bischoff got her car insurance renewal quote. It was £84 cheaper than last year's; the first time that had happened. Had her insurer, Admiral, drawn a line under the nasty trend for insurers (all of them) to jack up prices each year for no other reason than to coin in more money?

Apparently not. Victoria tapped her details into a price comparison website and found the policy she wanted for a whopping £165 less. The worst bit was the firm that was offering this bargain price was Admiral!

When she rang to complain, it took just eight minutes for Admiral's call centre to match its online price. The insurer did not even argue or try to defend its clearly inflated original quote.

These insurance companies really do try it on, so please don't let them.

Great gall

Carrying on my long-running theme of exposing how shops wheedle us out of every penny, beware vastly different prices from a retailer's stores and website. Denis Smith emailed after visiting his local WHSmith to buy a Lonely Planet travel guide for China (I'm told it's well worth going if you have the chance).

He says: 'A copy was available, but at £20.99 I decided not to buy it then, but to see what was available online. The identical book was available on the WHSmith website at £14.27.'

If that wasn't enough, he ordered the book and picked it up at the same shop within a couple of days.

And there was no delivery charge.

'Not in my lifetime, I'm in my late 70s, but the High Street will probably eventually consist of a few click and collect stores,' says Denis.

While I don't doubt that he is right, it concerns me how quickly daily life seems to be disappearing into the digital ether. At this rate, our High Streets will turn into wastelands without bank branches or shops and populated by a few drifters wandering in and out of the bookies and pubs.

Apologies for that depressing image, but it is exactly why the tax hikes being imposed on small shops, B&Bs and other family-run firms must be called off.

d.hyde@dailymail.co.uk

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