Sky News business editor Michael Wilson

Consumer watchdogs are supposed to bark, and EnergyWatch is certainly making some aggressive sounds.

Allan Asher is claiming that on average our energy bills are 30% more expensive than they should be, and that the energy companies are as much of a cartel as OPEC.

You may not yet be smarting from the recent 15% round of gas price increases, and that’s before the thinly veiled threats from the gas majors that there’s plenty more of that in the pipeline - uSwitch is talking about further 46% increases, implying an average energy bill of some £1300.

Asher also says that Ofgem, the industry regulator, is ‘out of touch’ and that the Competition Commission should investigate the recent price rises.

The industry’s stock reply is that all the six providers, British Gas, Npower, EDF and so on all buy from the same wholesale market, and what profits they do make are largely ploughed into the huge capital investments necessary to keep the country’s lights on.

Energywatch, in its cartel argument points to the fact that the average cost of  each supplier’s annual bill is roughly similar – on ‘dual fuel’ it’s now about £1000.

They suspect that is close to collusion. There is another way of looking at it – maybe competition is working, and no supplier wants to step out of line.

Either way, it’s clear that it’s all not very clear. We need greater transparency in the pricing about a household cost over which we have no control, and which is not going to get cheaper.

Comments

[chris mahon - south africa 21 May 2008 16:07:59]

What is really sickening about the oil price is that most oil companies break even at under $20. Sasol in South
Africa break even at under $30. In any sane world these companies and the Arabs would be the subjects of a class anti-trust action for gross profiteering. The Futures Market in oil 'MUST' be closed down. It is the poorest of the poor who are suffering - the rich can pay any price - poor people, in Africa, the Middle East and the East, are the ones suffering most from this rank stupid greed, because energy is needed to produce everything, but most importantly food. Do not forget "O Arabs of OPEC," it was the poor who were dearest to the Prophet Mohammed, blessings be upon his Name.

[Peter Burton Glasgow 21 May 2008 15:55:32]

I thought when the gas and electricity markets were openrd up there would be competition between all the companies but what do we see one company puts up prices by a certain amount all the others quickly follow suit with virtually the exact same price rise. When will ofgem investigate this

[Khalid 21 May 2008 00:33:33]

Sir
I congratulate Allan Asher for his commitment to fair consumer pricing, whilst at the same time allowing for reasonable cost ratios within.
Thus far as The Energy Ombudsman, the scary thing of all is that this body is chaired by none other than Utility executives, so does is take the brains of Britain to work out how independant they really are?
With the nonsense surrounding penalties for online disounts in the absence of direct debit payments curtailed, they should clear gas valves that emerge from within.
Now, the banking industry has benefited from information technology, whilst the very same utilites have manipulated that element for self gain to an extent that, what I perceive to be life essentials, ie: water, gas & Electric are driving many a health element furthering the costs sustained by the NHS etc.
Taking for example Gas & Electric, when usage goes up, their IT systems assume that the usage will be as such for the twelve month period thereafter, increasing monthly payments and unlawfully changing signed contracts in the knowledge consumers need such provisions, no matter what.
Unless such a time that online bill payment facilites are deemed alongside direct debit discounts, the rip off will continue and the utilities will wonder [Who let The Dogs Out-Baha Men]. What they dont like is consumers having control for accounts as well as a period of dispute resolution prior to the creation of the next bill.On e thing for sure, consumers have a lot of energy within and shall as always use it wisely.

[Dennis, Cramlington Northumberland 21 May 2008 00:09:04]

On top of her handing over £6,000 plus to Dick Turpin of course, in the great N Rock shareholder rip-off of old, helpless, people struggling to buy a loaf and some eggs.

[Dennis, Cramlington Northumberland 21 May 2008 00:06:27]

So, what does this do for the inflation %?
Does your mother, or mother-in- law, sleep easy and peacefully with these costs tugging at her funeral arrangements?

[Elizabeth Davies Cape Town 20 May 2008 16:51:34]

Perfect world, cut all costs, the Labour government have gone for broke, cheap North sea gas days over rover. What now for Britain, with listed companies it's all in the detail of the report to the shareholders, no relief anytime soon for Britain. Fuel costs will be high for some time to come, get used to it!

[Michael Cornwall 20 May 2008 16:18:36]

Good for Allen shout for us please.
Would't it be good if Cameron said Okay guys I'll freeze tax on petrol as Im getting enough.
Also from the street mortgages and loans from banks are still available down here I will give you a fuller picture, My solicitor has just told me people are switching to the banks that have not been so hit from bad investment in USA