Consumer group calls for energy supplier investigation

Tuesday, December 8th 2009

Consumer Focus says the energy market is failing to give customers a fair deal after industry regulator Ofgem noted a widening profit gap.

Ofgem's quarterly energy report estimates an increase in profit margins since February.

The consumer organisation claims this is a result of a dramatic decrease in wholesale prices, which is not being passed on to customers.

Margins are now £85 for dual fuel, £25 for electricity and £85 for gas, says Ofgem.

"Suppliers should cut prices now, not wait until winter bills have boosted their profits", said Robert Hammond, energy expert for Consumer Focus.

But a report released on December 7th by NERA Economic Consulting says the profit margins are at £9 for electricity, £10 for gas customers and a loss of £1 for dual fuel customers.

Mr Hammond says it is "laughable that suppliers say they are making such miniscule profits" and claims that Ofgem's analysis is more realistic.

Consumer Focus wants to see a Competition Commission investigation into the sector, which it says is "dominated by a small number of players who can self-supply".

In July 2009, Ofgem said a reform of the energy industry's rules was needed to better protect the interests of consumers.