Energy suppliers are facing more pressure to cut their prices, as regulator Ofgem reveals they are making £105 profit per customer.
Energy suppliers are now making around £105 profit from each dual fuel customer, up from £75 in November 2009.
Ofgem said this increase is due to reductions in wholesale prices, which have not been passed onto consumers.
To find out which energy suppliers have cut their prices, and to compare energy tariffs available in your area, visit Which? Switch. You can also find out how to cut your energy costs, buy a more efficient boiler and discover the most energy efficient home appliances Which? has tested.
Energy price cuts
Ofgem said the £105 profit was lower than it had previously expected, which was partly due to British Gas cutting its gas prices by 7% earlier this month.
In its latest report Ofgem said: ‘We wait to see how and whether other suppliers respond to this move.
‘If, at any time, we feel that the current arrangements and our proposed reforms are insufficient to protect customers, we will not hesitate to consider further action.’
Energy company competition
Ofgem has published new proposals which it says will make it easier for small and independent suppliers to enter the energy market.
It said that without an ‘effective threat’ of competition from new energy companies, existing suppliers may not be ‘sufficiently incentivised’ to pass on reductions in wholesale prices.
To compare tariffs available from all energy suppliers, big and small, visit Which? Switch.
Energy suppliers protest
Energy UK, which represents EDF, British Gas, Eon, Npower, Scottish and Southern Energy and Scottish power, has hit back at Ofgem’s report, claiming it omits a variety of additional costs that energy suppliers face, such as the cost of discounted tariffs.
It said that based on its own research, suppliers make just £31 profit a year from each dual fuel customr. However, all eyes will be on British Gas on Thursday as it is expected to announce a large surge in profits,following a winter that saw consumers suffer with cold weather and high energy bills.
Cheapest energy tariff
Alison Morrison, head of switching at Which? Switch said: ‘Energy suppliers didn’t hesitate to pass on increases in wholesale prices, but now their costs have fallen, they seem to be keeping the benefits to themselves.
‘Hopefully, if new players enter the market we will see an increase in competition, but for now the best advice is to keep an eye on energy price changes and make sure you’re on the cheapest energy tariff available.’
Lower your gas and electricity bills
You can compare energy prices and switch to a new gas and electricity supplier on Which? Switch. People who switched with us between 1 October and 31 December 2013 are predicted to save an average of £234 a year on their bills.
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