The Daily Telegraph reports that the energy watchdog is investigating the UK's "Big Six" energy companies, after figures revealed huge differences in their wholesale energy costs.
In recent years, gas and electricity prices have risen across the board - with suppliers often following each other in announcing price hikes. The most recent was Scottish Power, which is increasing gas prices by 20%, and electricity by 10%.
The companies claim the rises are due to escalating wholesale costs.
But Ofgem has discovered wholesale costs for the suppliers vary by up to 30%.
It is investigating whether companies which get cheaper wholesale energy are making more profits with needless price hikes.
The problem, it believes, is that those companies which are sourcing their wholesale energy for less - up to 27% in some cases - are charging customers as much as companies who are paying more for wholesale energy.
Ofgem believes that cheap gas and electricity should be offered to customers when companies are paying less for their supplies.
It is also investigating why all the energy companies are blaming rising wholesale costs for bill hikes, when not all of them have been hit by the alleged rises.
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