Moneysupermarket Tells Energy Customers Still To Shop Around

1st August 2014

MoneySuperMarket Comments on Ofgem's Announcement That the Big Six Energy Firms Will Double Profit Margins Over the Next Year.

Commenting on Ofgem's announcement that the Big Six energy firms will double profit margins over the next year, Stephen Murray, energy expert at MoneySuperMarket, said: "This news from Ofgem is yet another example of a failing energy market, at a time when UK households are still feeling the squeeze from high bills. With talk of price freezes and no price rises likely until after the General Election in 2015, it is easy for customers to think that they are on a good deal. However, with wholesale energy costs falling rapidly, it appears that many energy companies are hoodwinking customers through clever marketing tactics, when in reality they should be passing on these savings and reducing prices now.

“While the industry is challenging Ofgem on the accuracy of these estimates, we already know that margins have been increasing year-on-year so it is an upward trend that appears to be continuing. The facts are, prices have been rising sharply over the past few years, while wholesale energy costs have been falling dramatically over several months so margins have increased as a result. Centrica has said in today's results announcements that it cannot pass on wholesale cost reductions to customers because it has already purchased gas for next winter at a much higher price, which suggests an element of bad planning and does raise the question of when will suppliers pass on the benefits of the energy they HAVE bought at lower prices and make sure it is getting its customers the best deal on energy.

“Ofgem has already referred the energy market to the Competition & Markets Authority (CMA) to investigate issues such as customer pricing and profits, but this is likely to take 18 months to complete. Households shouldn't wait until this is resolved. They need to fight back and be prepared to make their own savings. Taking five minutes to compare energy deals and switching to a cheaper product could save £275 on average."