The energy industry regulator has accused energy companies of failing to pass on lowered wholesale costs to customers and has stated that they are now overcharging in many cases.
Should be cheaper
Dermot Nolan the Ofgem Chief Executive has pointed out that both gas and electricity prices should be cheaper for the vast majority of UK households and that wholesale prices have dropped by around one third in the last 18 months. However prices had not fallen, especially for the 70% of customers who are on variable rate tariffs which have not changed in the last 12 months.
Figure released earlier this week have shown that gas and electricity wholesale prices have fallen to a five year low and currently sit at just £36.76 per megawatt hour. However those on variable deals are not seeing the benefits of the worldwide cheaper prices according to Mr Nolan. He believes that there is not enough strong competition in the market to encourage a fairer approach. He suggests that customers switch to a better deal in the meantime, while the Competitions and Markets Authority comes up with some more long term strategies following their investigation into the market.
Energy UK – the trade body for the energy industry, has pointed out that there are more energy companies in the market now than ever with 34 suppliers. They also suggest that people switch and that the improved competition has allowed companies to fix their past mistakes.