Ofgem could impose price controls on the Big Six energy firms

Ofgem has warned that energy companies should reduce their prices and simplify tariffs in order to avoid the regulator having to enforce price controls for the first time in ten years.

A Competition Commission inquiry is an alternative solution in order to combat the dominance of the market by the Big Six players, reports the Independent.

It is hoped that drastic measures are not needed and a compromise can be reached between the government, Ofgem and energy companies.

A spokesman for UK Energy told the news provider: "Companies are looking very closely at all the reforms proposed and listening hard to what their customers are telling them about the choices and the service they expect."

It comes after energy companies have come under criticism for price hikes and not decreasing the cost of energy in line with wholesale prices.

There are now around 6.3 million households in the UK in fuel poverty, which means they spend at least 10% of their disposable income on energy bills.