Ofgem yesterday released its 12-month forecast for price and cost trends in the energy market.
The report takes into account network costs, wholesale costs and environmental and social obligations, among other factors, with the aim to make more transparent the connection between the cost providers incur and what consumers are charged for supplying gas and electricity.
The forecast found that due to wholesale gas costs falling by about 28% — and despite recently announced price cuts of 4% on average — energy suppliers will make an estimated £114 profit per customer (pre-tax).
The ‘final straw’ for customers?
Throughout January, the big six have each in turn been announcing price cuts — from EDF Energy’s cut of 1.3% to npower’s 5.1%. These figures were met with much criticism, not only for the low amount of the cut, but that in some cases the implementation would come after winter.
With Ofgem’s latest report, Director of Consumer Policy at uSwitch Ann Robinson hopes this will be the ‘final straw’ for customers, spurring them to compare tariffs and switch to a better deal:
“After this month’s inadequate cuts to standard gas tariffs prices, the revelation that forecast profit margins are increasing will be the final straw for consumers.
“The big six are now officially out of excuses for not making double-digit reductions for standard tariff consumers. Today’s Ofgem figures are the latest evidence that to cut energy bills customers need to take matters into their own hands and switch to a more competitive tariff.”
OVO Energy cut prices more than 10%