Energy companies overcharging customers by £1.7 billion

Energy watchdog Consumer Focus has accused UK energy suppliers of overcharging customers a staggering £1.7 billion, by not fully passing on decreases in the wholesale cost of energy.

As reported by the Independent and the Guardian, gas prices should be 7.4 per cent cheaper and electricity bills 3.1 per cent cheaper, Consumer Focus claim. This suggests that the average household is currently charged £74 a year more than they should be.

The findings will increase calls for an inquiry into the £25bn-a year-energy sector, which remains dominated by only six suppliers: British Gas, E.ON, EDF, npower, ScottishPower and Scottish & Southern.

Philip Cullum, the Consumer Focus deputy chief executive, stated: "Consumers have feared for months that the big six suppliers might not have passed on the full cuts in wholesale prices, but the companies claimed to have acted fairly.

"Our new research for the first time shows the reality. The companies are pocketing £1.6bn extra while millions of households struggle to make ends meet.

"Energy firms should take immediate action to put things right. A failure to act, and to ensure that people pay a fair price for energy, could have serious consequences for the sector," he said.

As the BBC observes, industry regulator Ofgem has questioned the methodology used by Consumer Focus.

Nonetheless, it is clear that customers are missing out: "according to the latest research, only one in ten UK households is currently on the cheapest energy tariff possible. This means that more than 20 million UK households are paying over the odds", commented SuperSwitcher MD and energy expert, Fred Rojahn. "The only way to be sure that you are not being ripped off is to regularly check for the cheapest tariff, and to switch supplier if necessary. This puts additional pressure on suppliers to offer competitive prices going forward." Just click here to compare all UK gas and electricity tariffs now.

To make regular tariff comparisons painless, SuperSwitcher offers a free account management tool. Once set up, this lets you determine the best tariff for you with a single 'click'.
Simply register by clicking on the orange link at the top right-corner of the screen; alternatively, if you already use Facebook, just click on the blue "Connect with Facebook" button to set up your account in seconds.