Following hot on the heels of British Gas announcing a 23% rise in earnings last month, on Monday E.ON confirmed a 30% increase on its earnings in the first six months of 2012, £245 million compared to £198 million in the same period last year.
The publication of these first half yearly profits has prompted consumers to call on the energy providers to cut their energy prices and has led to Consumer Focus posing the question: what exactly is a fair price for energy?
Well, that’s the 64,000 dollar question.
Commenting on E.ON’s 30% rise in earnings, Richard Hall, Head of Energy Regulation at Consumer Focus said the announcement will reopen the question as to whether a drop in wholesale prices are being fed through fairly and fully.
“E.ON’s profits have jumped by 24% despite it selling off its profitable network businesses last year. Such a big increase, hard on the heels of British Gas profit rises, will leave customers questioning whether the price they’re paying is fair. Wholesale prices are now a long way from their peak and E.ON has reported greater margins based on changes in their costs.”
He added that while profitable companies are needed for the economy consumers need to know that they are paying out a fair price for energy through a competitive and transparent market.
uSwitch.com have added their weight to the fair price for energy debate. The price comparison website says that suppliers are benefiting from a reduction in wholesale energy prices and that savings need to be passed on to consumers.
“All the big six suppliers trimmed their prices earlier this year, but the recent trading and profitability announcements suggest that they could do more,” commented Ann Robinson from uSwitch.com.
“A second wave of price cuts now will not only help customers to better afford their bills but would also give concrete proof of the industry’s true commitment to rebuilding trust and confidence with consumers.”
E.ON have promised not to increase their energy prices this year. Households concerned about rising energy bills should look to making changes in their lifestyle, in terms of behaviour when it comes to everyday routines such as showering, heating and washing clothes. Energy efficiency of appliances should be another consideration, along with the amount of energy sapping electronic gadgets being used in the home. Appliances should always be switched off and not left on standby when they aren’t being used, and shopping around for a cheaper energy tariff could also help save you money.