UK power and gas supplier Ovo Energy has scrapped plans to increase prices for its variable rate customers due to a drop in wholesale costs, breaking ranks with rival suppliers who have all imposed double digit increases.

Since we announced the planned increase in our variable prices, on the 26th October, wholesale costs have fallen, Ovo managing director Stephen Fitzpatrick said in a statement.

In response to this change in the market we're delighted to announce that we will not go ahead with the planned increase, he said.

The increase was set to take effect on January 1, 2012.

Ovo Energy, which supplies power and gas to around 53,000 customers in Britain, actually reduced its charges for gas supplied to dual fuel customers in August, at a time when five of Britain's main energy suppliers increased power and gas tariffs by an average 14.44 percent.

The new market entrant, which started supplying energy two years ago, has a turnover of 70 million pounds and plans to start its own power generation projects, preferably renewable energy, to supply its targeted one million customers by 2020.

(Reporting by Oleg Vukmanovic; editing by Keiron Henderson)