Energy companies' price increases - have they been telling us porkies?

28 October 2013

BURNING BLUE FLAME ON GAS COOKER HOB. Image shot 2006. Exact date unknown. Everyone is more than aware of some of the gasping price hikes concerning our beloved energy companies, with rises in advance of 10% across the board. The Big Six have been throwing their hands up and saying that this isn't their fault and they've had to do it because of increases in wholesale prices.

However, Ofgem have been collating their own figures and it seems that rises in wholesale prices only went up by 1.7% over the last year. If that's right, prices should've gone from £600 to £610.

In addition to that, Ofgem reckon that energy companies’ average net profit margin has more that doubled.

Representatives from each of these woeful companies are going to face MPs in Westminster this week for a grilling (if the country can still afford to grill things). Energy minister, Greg Barker, is going to throw down the gauntlet to the energy companies to see if they'll return the millions customers have spent thanks to overpaid bills through direct debits. If not, fines could be issued.

He said: "With more hardworking people switching to direct debit to get the best deal on their energy bills, it is vital that they aren't being unknowingly ripped off. The better energy companies will now automatically refund your cash if you build up more money than required to meet your normal bill or will pay you interest if you are in surplus. However, it looks like some companies aren't doing that."

Someone's taking the piss.

TOPICS:   Utilities

2 comments

  • Alexis
    What's the point of Ofgem then? Have they only just got the wholesale prices in or something?
  • badger
    Perhaps OfFob are still counting how many accountancy tricks the power companies use to obscure their profits. Energy companies "claim" to only be making a tiny percentage profit from domestic customers when what they're really doing is splitting the delivery cost - one division charges another division an artificially high amount to deliver the power to the last company in the chain. So the energy company can claim only to be making a small profit, but a vast profit has already been amassed BEFORE that last step to the customer. Can you guess which part of the chain is used to calculate the Board of Directors' bonuses? Can you?

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