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Energy Advice Line joins call for price cut
The Energy Advice Line has joined calls for the Big Six energy companies to cut gas and electricity bills for households and businesses following a sharp fall in wholesale costs.
Julian Morgan, managing director of the business electricity price comparison, switching and advice serve for energy users, said it was only fair that customers benefit from lower wholesale energy prices.
"It's now time for the energy regulator to consider putting pressure onsuppliers to pass on some of these savings to customers," Mr Morgan said.
"There is no evidence that suppliers intend doing this of their own accord, nor are they making any attempt to explain why not.
"Customers deserve better. Suppliers are quick-off-the-mark to raise their retail prices when the wholesale cost of energy rises, but very slow indeed to react when wholesale prices fall.
"Customers who are struggling to power their homes and businesses pay the price when the wholesale cost of gas goes up. It's only fair they should benefit when it falls."
This week, OFGEM said that gas prices for next day delivery reached their lowest level in almost four years at the start of June, and are 38% lower than this time last year.
Prices for electricity reached their lowest level since April 2010, and are currently 23% lower than June 2013.
In a letter to the industry, the regulator said that failure to communicate with consumers about prices risked further undermining public confidence in the energy market.
"It simply doesn't wash for suppliers to argue that the government's environmental policies are to blame for higher retail prices," Mr Morgan said.
"These green levies are insignificant when it comes to the costs of wholesale power, which are the lowest that they have been in a very long time.
"It's time suppliers dropped their prices. We agree with OFGEM that if suppliers are going to rebuild consumer trust they must explain clearly what impact falling wholesale energy prices have on their pricing policies.
"I suggest they can well afford to cut their prices but if they disagreethey need to explain why."
OFGEM has proposed referring the retail energy market to the Competition and Markets Authority after a joint report with the Office of Fair Trading and the CMA confirmed that competition was not working as well as it could be.
Last week, data published by the regulator showed dual-fuel suppliers were poised to make an average profit of £96 per home over the next year, compared with an estimated £44 over the past 12 months.
The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.
The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice service for business energy customers throughout the to of their energy contracts.
For further information visit www.energyadviceline.org.uk