Gas and electricity price rises questioned
Published on : 22/08/2011
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Government energy watchdog Ofgem is investigating the UK's biggest energy companies amid fears recent price rises on gas and electricity were unfair.
Energy suppliers will be asked to show how they calculate their bills, as the recent over-inflation rises have been marked up as potential over-charging.
Ofgem has asked for details of how and when price rises are applied to consumer's energy bills too, as it tries to iron out claims that customers may be charged extra before the raised prices officially start.
Only one of the UK's 'big six' energy firms is yet to announce a price rise for gas and electricity, EDF Energy.
The others have all announced huge increases in their fuel costs. British Gas, E.ON, Npower, Scottish and Southern and Scottish Power are raising prices by between 7.2% for electricity (Npower) to 16% (British Gas) and between 15.7% for gas (Npower) and 19% (Scottish Power).
Part of the problem is "confusing" tariffs - which are said to be both too complex to understand properly, and too varied to be able to compare energy prices with other providers.
Many of the price rises were announced as the parent companies posted huge profits. Whilst those raising prices have blamed soaring wholesale gas costs, the latest figures show wholesale gas has actually come down in price.
The energy companies have to buy units of energy in advance - and so may have paid more for their gas previously. But campaigners claim price drops in wholesale are not passed on to the consumer.
Whilst EDF Energy is yet to announce a price rise, a report by the Independent last week claims the company had to shell out £200,000 to repay customers after a fault with the telephone meter reading service caused thousands to be overcharged.
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