Ofgem Accuses Leading Energy Providers of Profiteering
By David Holmes on February 9, 2010
A recent report published by Ofgem further highlights how leading energy suppliers have reaped huge profits despite falling wholesale fuel prices. In light of the freezing weather that has continued to affect Britain throughout February, the failure by all but one of the so-called ‘big six’ energy companies, which comprise British Gas, E.ON, EDF, nPower and Scottish Power, to lower their domestic fuel bills has caused concern and attracted disapproval from Ofgem and the UK Government.
Although British Gas has moved to reduce its domestic gas prices, it is feared prices will soon return to peak levels and beyond. The unfortunate combination of inflated domestic energy bills and the coldest weather experienced by Britain in 30 years has led to increased fears fuel poverty will strike yet more households across the country.
According to Ofgem, the leading energy companies are making an average profit of £105 per year from every dual-fuel customer – a figure that has increased by 40% over the past three months. Although most of the big six energy companies can hide their UK profits in international business, British Gas is expected to reveal profits of more than £500 million later this week. Once again, it would appear all of the costs and none of the savings are being passed on to consumers. Secretary of State for Energy and Climate Change, Ed Miliband, has entered the discussion by stating: “Ofgem’s report shows energy companies need to cut their prices. British Gas’ recent cut was a welcome first move, but we need to see all suppliers passing on the full benefits of lower wholesale prices”.
Liberal Democrats energy spokesman, Simon Hughes, said: “Energy companies clobbered households even as they struggled through the cold snap. Cynical price cuts now won’t disguise bumper profits made on the back of grossly unfair fuel bills. Firms should be forced to show how much profit they make on every pound they charge at the bottom of every fuel bill”. Michelle Mitchell of Age Concern and Help the Aged added: “The increase in energy companies’ profit margins comes at a time when many older households are worrying about how to pay costly post-freeze heating bills”.