In recent energy news, the big six made an announcement that they would be cutting the prices of their standard tariffs, which was followed by a sigh of public relief, but energy consumers shouldn’t rejoice too soon.
The lowest price dropped was from EDF, who cut prices by a measly 1.3%; with npower leading the group, slashing prices by a more respectable 5.1%. Despite this, consumer group Which? states that they could have, and should have, been cut by up to 10.3%. Failure to pass on these savings has left households paying on average £145 more than what they need to for their energy.
Scott Byrom, energy expert at UKPower.co.uk, said: “It goes without saying that energy suppliers could have done more to reduce energy bills for their customers. With wholesale prices down 28% Gas and 19% Electricity compared to last year, suppliers are without doubt benefitting from cheaper prices which aren’t being filtered through to customers’ bills.”
The big six currently make up to more than 93% of the energy market here in the UK, as industry expert Richard Lloyds states.
“This analysis has placed a giant question mark over how suppliers have been setting prices over the last two years.”
Byrom agreed, adding: “You needn’t look further than British Gas who passed on a price cut of 5% to the vast majority of their customers saving a measly £20 a year putting their average bill at £1,172 when at the same time they launched a tariff averaging £922 a year via their Sainsbury’s Energy partnership offering a massive £250 a year saving.”
However, Dr Richard Westoby, Director of retail economics at SSE, disagrees with Lloyds analysis, stating: “This analysis ignores many fundamental factors behind movements in household bills and suppliers’ costs, ranging from weather and consumption to green levies and network costs."
Ofgem has stepped in by openly welcoming the analysis and the contribution to the debate on energy prices and now the Competition and Markets Authority are conducting an investigation into whether the firms are indeed playing fair, the findings of this will be released later this year.
Now is the perfect time to switch over to an energy supplier who cares for its consumers. Millions of people who have never switched can easily save hundreds of pounds a year. If an average household is paying an extra £145 which suggests that a whopping £2.9 Billion is being overpaid to energy giants.
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