I welcome the news that Ofgem is to hold a wide ranging investigation into the questionable practises of the UK retail energy sector after the recent price rises. There is a real need to investigate the current 'competitive market' which does not work in the interests of customers and that an investigation is needed to clamp down on alleged 'cartel-like behaviour'.
We need is a serious investigation into the competitive practises of energy companies by the regulator. Any investigation must be thoroughly in-depth and tackle the cartel-like behaviour of these companies.There can be no justification for profit margins to rise by 40% in less than three months while at the same time inflicting significant energy price hikes on consumers.
British Gas customers are to face a 7% rise in gas and electricity bills which comes into effect on 10th December. As a result of rising wholesale prices, said British Gas. oddly enough British Gas has become the second major UK energy supplier to announce price increases for the winter months - when there is a greater demand, and coincidently a greater profit to be made.
Scottish and Southern Energy also intend to raise their domestic gas charges by 9.4% at the start of December, blaming wholesale prices for the increase in customer bills. This price increase announcement, was made just before just before they reported a 6.1% fall in pre-tax profits to £386m in the first half of the company's financial year.
The bottom line is that current energy system and the energy market seriously disadvantages all consumers, especially the most vulnerable in our society. There needs to a mandatory social tariff for consumers so that the fuel poor are removed from a competitive market that simply doesn't work for them or the rest of us.
We have a very real problem here in Wales where, according to National Energy Action Cymru, a third of properties live in fuel poverty. We must take steps at local, national and international levels to begin tackling the causes of fuel poverty.
Ofgem must clamp down on these injustices and come back with clear and firm recommendations. If the energy regulator takes firm steps against the actions of these greedy energy companies then this would be an important first step.
I suspect that the Ofgem investigation, won't come close to the Conservative pre-election promise for a proper enquiry into the energy industry. Oddly enough that pre-election pledge for an independent inquiry into the £25 billion-a-year energy industry (which has been subject to lengthy and repeated criticisms surrounding accusations of profiteering on electricity and gas) was quietly dropped by the Com Dem Coalition Government in August, no doubt when they hoped that no one would notice.