Britain’s big household energy suppliers have come under withering attack from the industry’s consumer watchdog over their failure to pass on cheaper prices to customers, just days before British Gas is expected to announce a £600 million rebound in profitability. Energywatch, the consumer protection group, accuses the dominant players in the multibillion-pound sector of operating in an “anti-competitive” market that is effectively closed to new entrants and of “laughing all the way to the bank”. Allan Asher, Energywatch’s chief executive, claims that household gas and electricity bills are 15 per cent – or an average of £135 a year – more expensive than they should be because of the “anti-competitive” nature of the energy market. He told The Times:“Earlier this year we were talking about how there was going to be a price war, given how wholesale gas prices had come down. There hasn’t been one and there was never going to be one. “There is no rivalry between the suppliers. They control the generation and they each have a comfortable number of customers. They’re laughing all the way to the bank. Not even a company with the power of Tesco could break into this market.” The comments will pile pressure on Centrica, the parent of British Gas, as it prepares to unveil interim results on Thursday. Those are expected to show that British Gas made a profit of £500 million in the six months to the end of June dramatically up from a £143 million loss recorded in the same period a year ago. The turnaround comes after a sharp fall in the wholesale gas price since last summer. Despite a rally in recent weeks after the closure of a North Sea pipeline, forward gas prices for this winter are just 44p per therm nearly half the level of a year ago. In March British Gas became the first supplier to cut residential bills for seven years and its annual dual-fuel rate has come down by £200. However, City analysts believe that the lower wholesale price means that it has managed still to restore margins to between 6 and 8 per cent. Analysts add that BG’s rivals are operating at similar margin levels, despite announcing price cuts of their own in the spring. There is now a difference of just £6 between the average standard dual-fuel rates charged by five of the six suppliers. Mr Asher argues that this shows that instead of fighting for customers, companies such as British Gas are more content to protect what they have. “If this was a genuinely competitive market, prices would have come down by more,” he said. Centrica is expected go on the offensive this week by insisting that one of the only reasons that wholesale prices have come down is the investment that it has made to bring more gas to the UK. There is speculation that it is considering new supply deals in Algeria, Nigeria, Trinidad and Malaysia. Ofgem has pointed continually to the increase in the number of consumers switching suppliers as a sign of the competitive nature of the British market. Four million people switched to a cheaper supplier in 2006. A British Gas spokesman insisted that Britain was “the most competitive energy market in Europe”. He added: “To suggest otherwise flies in the face of the facts.” Patrick Heren, managing director of Heren Energy, an energy consultancy, said that there was “more room” for suppliers to cut bills. However, he said: “These companies have lost a lot of money in the past two years and, while there are concerns about them being vertically integrated, there is immense competition. “While a lot of people point the finger at British Gas, they have done more than anybody else on price this year. Powergen, Scottish & Southern Energy and EDF all held on to their higher tariffs for longer.”

Related posts...

• June 22, 2010 -- UK Business Energy Prices: (3)
  A new survey carried out by the Economist Intelligence Unit has revealed that over 80% of British firms expect energy and fuel prices to rise sharply and almost 50% have great concern that the UK coul...
• February 21, 2010 -- Identifying a Half Hour Meter: (0)
  How to find out if you have a half hourly meter – So how do you know if you have a half hour meter?  It’s actually quite straight forward, and all you will need to find this out is a recent copy o...
• February 10, 2010 -- UK Business Gas Prices: (0)
  Business Gas Prices can be difficult to understand, as there are many different types of pricing structures available.  You could simply ring around and obtain gas prices direct from suppliers, but it...
• February 7, 2010 -- Oil Prices Back To $70 Range: (0)
  Oil prices plunged in a busy trading session on Friday, triggering big losses across the commodities markets, as investors went back to buying into the US dollar.  Crude oil prices did have a partial ...
• February 5, 2010 -- CRC Business Lights: (1)
  The era of the 'on-all-night' illuminated high street could end, the Environment Agency is predicting. The agency says new rules will force businesses to switch off lights and displays at night to mee...
• February 3, 2010 -- Bglobal Smart Meter Deal: (3)
  Bglobal Plc said it has signed a new agreement to supply and install smart meters for British Gas Business during 2010. The contract value is anticipated at more than £12 million. In addition, the com...

RSS feed for comments on this post. TrackBack URI

You must be logged in to post a comment.