We know energy companies don’t have the best of reputations, but the news of their soaring profit margins will not do anything to improve their already tarnished character.
In figures just released by Ofgem, the energy watchdog has revealed that hikes in gas and electricity tariffs this summer has enabled the “Big Six” to turn over a profit of £125 per customer, on a typical standard energy tariff.
As if that news isn’t startling enough, the fact that this figure is up on the £15 they were previously making just four month ago – a rise of 733% – it’s just rubbing more salt into the wounds of millions of customers struggling to pay their utility bills. Not least because it emerged earlier this week that families are having to endure the biggest fall in household incomes since the 1970s.
According to Ofgem’s September Electricity and Gas Supply Market Report for September, at present the average dual fuel bill for customers signed up to the most common standard tariff is £1,335. But that figure is set to increase next month, rising to £1,345.
“Our latest retail report does nothing to change our findings in March that competition is being stifled by a combination of tariff complexity, poor supplier behaviour and a lack of transparency,” commented an Ofgem spokesperson.
‘This lack of competitive pressure means we are not confident prices are being set fairly. This is why we are proposing to introduce the biggest shake up in the retail market since competition began.’
The figures – which are based on a snapshot of the amount energy providers are set to make if prices for dual fuel customers was to remain the same for the next 12 months. Energy providers have blamed the price hikes on an increased dependence on imports and a rise in wholesale prices, and not unsurprisingly they have been quick to hit back following the revelation of their soaring profits, disputing Ofgem’s claims.
At the centre of its proposals for an a radical reform of the energy market, Ofgem also said it would be forcing suppliers to simplify tariffs in an effort to make it easier for consumers to compare prices. Given that there are currently more than 400 tariffs to choose from that’s no easy feat. And it’s not just customers that are confused by the vast number of energy tariffs available.
An investigation by the consumer body Which? has revealed that even their own staff are confused and have difficulties determining which is the best deal.
Energy consumers will find even more reasons now, to be enraged by skyrocketing energy prices. If ever there was a time for less talk and more action, that time is now.