Energy prices look set to soar even further, after a report by energy watchdog Ofgem has shown that the major energy providers have incured huge reductions in their profits.
While the “Big Six” energy providers were making a profit of £75 per customer last year, this year that figured has dropped to just £15. Various factors figured into the decrease in profits, including rising wholesale costs which have shot up by 30% since December, due to the Middle East unrest, as well as the Japanese nuclear crisis.
Experts have warned the drop in profits will mean energy bills are likely to rise by at least 15% as the companies try to claw back their revenues to please shareholders.
Guenther Oettinger, EU commissioner for energy, has announced that gas and electricity companies would have to cut their energy sales by 1.5% a year.
Insiders say this would put even more pressure on the Big Six – British Gas, Scottish & Southern Electricity, npower, E.ON, EDF and Scottish Power – to meet their profit targets despite selling less.