Thursday, 25 June 2009

THE GREAT GAS PRICE RIPOFF

The new report by Customer Focus (the Energy watchdog) makes interesting reading as it flags up an interesting fact, in that the energy suppliers have not been fully passing on declines in wholesale costs to their customers - which means that Customers are being overcharged by an average of £74 on their annual energy bills.

Despite some recent fluctuations in price, Crude oil has fallen from $147 a barrel in July last year to about $70 a barrel. No one is disputing that the six main energy suppliers have not cut their prices since the beginning of the year, but Consumer Focus research suggests that current gas bills should be at least 7.4% cheaper (£60.10 annually) and electricity bills at least 3.1% cheaper (£13.80 annually).

Customer Focus’s new research for the first time shows the reality, that the energy companies are pocketing £1.6bn extra, while millions of households struggle to make ends meet. Consumer Focus says its research, based on applying hedging strategies outlined by the energy regulator Ofgem, shows that energy suppliers are overcharging customers by a combined £1.66bn this year.

The Energy companies who have reaped a 500% increase in profits over the last five years have been quick to blame rising oil and gas prices, and quick to rake in the profits, as the average annual dual fuel bill has risen from £662 a year in 2005 to 1,048 in 2007. The New Labour Government has been more than happy to rake in the extra tax revenues and the Energy companies have been equally slow to pass on reductions in energy costs to their customers – the only real losers in this happy picture are the energy customers.

So what we have here is an effective monopoly on energy supply in the UK; the number of energy supply companies has fallen from twenty two to six in the last ten years, with less that £30 differential between all of the energy supply companies, which works out to be no more than a few pence a week difference in bills, what we have is an energy cartel which brings minimal benefit to hard pressed energy customers but maximum gain to it's members. Hmmmm....

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