Ofgem: Energy suppliers will see profits fall over coming year
The energy regulator has announced that it expects the big six energy suppliers to make pre-tax profits of about £102 per household.
New figures released by Ofgem suggest that energy suppliers will be making about £102 per dual fuel energy customer, over the next 12 months.
The numbers are in stark contrast with previous estimates issued by the energy regulator, which stated that the big six would see their profit margins per customer double in the next year.
A number of suppliers disputed Ofgem’s initial estimates, which outgoing Chief Executive of British Gas’ parent company Centrica, Sam Laidlaw referred to as “theoretical” and “confusing”.
Energy UK: ‘Suppliers make an average margin of about £1 a week per household’
In response to Ofgem’s new figures, Chief Executive of energy industry body Energy UK, Angela Knight said: “At last Ofgem has confirmed what we have been repeatedly saying and that is that suppliers make an average margin of about £1 a week per household and profit is even less. The accurate numbers have been taken from the companies’ audited accounts, so we all know they are right.”
Knight added that Ofgem should cease issuing estimates in relation to sensitive issues such as energy supplier profit margins as they can be “misunderstood, misinterpreted and can also be misleading.”
Break down of a typical energy bill
With the average dual fuel bill costing £1,330 per year, the new figures mean suppliers stand to make about £102 per household, over the course of the next year.
Of the full cost, £598 represent wholesale energy costs, a further £386 will consist of social and environmental policies and operating costs are around £174.