Ofgem the gas and electricity regulatory watchdog say it will be investigating the recent energy price rises because they have ‘significantly widened supplier’s profit margins’.
An investigation back in 2008 found no anti-competitive behavior but Ofgem will be reviewing the UK domestic energy market over these concerns in order to protect consumers.
Three of what is known as ‘the big six’ energy suppliers in the UK have increased their prices over the last few weeks and Ofgem say that the net profit margin of an average energy customer has risen from £65 to £90, since September this year. This is a 38% increase.
Alistair Buchanan Chief Executive at Ofgem said: “The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in.”
“So we will go beyond our usual quarterly reports on prices and do a comprehensive review of the retail market and our recent reforms from the consumers’ perspective.”
“Greater transparency in the market is good for consumers, investors and for the energy industry as a whole.”
“The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in”
Craig Gedey, Marketing Manager at Debt Advisory Line said: “Gas and electricity is essential for everyone this winter, especially since the cold snap has hit the UK this week.”
“Choosing simply isn’t an option, utilities are essential for everyone and increasing prices will put further pressure on household budgets this winter.”
“Anyone who is struggling to keep up with rising utility bills or perhaps repayments on unsecured debts alongside their everyday household finances should get professional debt help.”
“On average our customers reduce their debt repayments by 49% and we will deal with creditors on behalf of our customers.”
Of course the Ofgem review will not have an effect on consumer’s bills but Ofgem can make changes to the way companies operate.
Adam Scorer at Watchdog Consumer Focus said: “What the Ofgem review will not show is that the CEOs of the six major suppliers are huddling around a park bench with a calculator.”
“They do not feel the hot breath of competition on their necks,” he said.