Energy Price Hikes Announced: The Time To Cap Is NOW

EDF's price increases are just the beginning. If you want to avoid energy inflation of up to 50%, go for a capped tariff.

Just last week, I wrote an article urging Fools to cap their gas and electricity costs as soon as possible, in order to avoid predicted price hikes.

Today -- proving me and many other energy `doom-mongers' right -- energy supplier EDF has announced it will increase electricity prices by 17% and gas prices by 22%.

What's more, these hefty price hikes will take effect immediately.

Why is this so important?

Obviously, this is a blow to EDF's millions of customers.

However, it's also important because EDF is one of Britain's biggest energy companies -- and today's move is likely to spark a domino effect among its competitors.

According to Florian Ritzmann of Xelector, which runs The Fool's gas and electricity comparison tool, "suppliers have been watching each other closely for weeks, if not months", to see who will increase prices first.

Now EDF has announced its tariff changes, Ritzmann believes other energy companies will follow suit "in very short order".

It could be just a few weeks before every big gas and electricity company in Britain has hiked prices in line with EDF's increases -- and it's unlikely that energy price inflation will stop there.

Insiders all agree that we should expect to see a further round of rises either late this year or in early 2009, possibly taking the total increase in our energy bills to around 50%.

What can I do?

In last week's article, I explained the benefits of capping your energy tariff. You can still do this -- but thanks to EDF's announcement it's likely that the best deals will now be withdrawn very swiftly.

By opting for a capped tariff, you can lock yourself in to paying fixed rates on your gas and electricity. This way, you'll be protected from price rises -- at least temporarily.

You can switch to a capped tariff quickly and easily online, via The Fool's comparison tool. There's even a special button that will allow you to filter out capped tariffs from the rest on offer.

But if today's news has inspired you to consider capping, in my opinion you need to do so quickly. That means today or tomorrow, if you can.

Wait too much longer, and the cheapest capped deals will have started to disappear from the market. And that will be at the same time as the rest of our energy suppliers begin ramping up their prices.

Switching to a capped tariff now might take you a few minutes to organise online -- but it could save you a lot of money and worry during the coming winter. 

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