Confusion over prices means consumers must shop around, says Energy Advice Line
Confusion over volatile energy prices made it imperative for consumers to shop around for the best deals, according to the Energy Advice Line.
Julian Morgan, managing director of the business electricity comparison, switching and advice service, said claim and counter-claim about the future direction of energy costs made it more difficult than ever for consumers to understand the market.
Mr Morgan’s comments follow a dispute between OFGEM and Britain’s largest domestic energy supplier, Centrica, over the regulator’s claim the industry was likely to double its profits over the next 12 months.
Centrica disputed the claims, saying that British Gas, its household supply arm, had recorded a 26% slump in profits in the first half of 2014 and there was no chance of a turnaround over the next year.
“It’s clear from the this latest round of claim and counter-claim involving OFGEM and the energy industry that consumers are once again stuck in the middle,” Mr Morgan said.
“The problem stems from the fact that suppliers make it very difficult for consumers to understand not only what they’re paying for their energy, but how suppliers come to set those prices.
“We believe this is an area that demands OFGEM’s attention.
“Consumers deserve to know whether the price they are paying for their energy is reasonable, but if OFGEM and the industry cannot agree on whether suppliers are making hefty profits or not, what hope do consumers have?
“The only option is for consumers to pay close attention to their energy bills and check the market by shopping around, every 6 months if possible.
“This will give them a good understanding of how energy prices are moving, and enable them to take advantage of good deals where they find them.”
In its latest monthly estimate, OFGEM claimed overall industry profits were likely to rise to £106 per household over the next year, up from £53 over the previous 12 months.
But British Gas, which serves 11 million homes, hotly rejected the claim, saying “not a single one” of the 25 independent analysts following the company forecast profit margins would double “or anything like that”.
The company said bills were likely to be about £90 lower this year than in 2013, thanks to mild weather and a freeze on energy prices.
But Mr Morgan said that if British Gas profits were down as the company claimed, it was likely to be due to the warm winter and lower energy consumption by consumers, not lower prices.
“The only thing for consumers – both domestic and business energy customers – to do is to shop around to see for themselves what energy prices are doing,” Mr Morgan said.
“Services like the Energy Advice Line, which are reputable and independent, help thousands of customers each year to find them best deals.
“The service is free, and also quick and simple. It really is the only option when energy prices are surrounded by such confusion.”
The Energy Advice Line is the UK’s leading impartial comparison, switching and advice service for businesses and householders. It actively campaigns for reform of the UK’s energy market to boost competition, get consumers a better deal from suppliers and lower energy prices.
The Energy Advice Line’s price comparison and switching service is free and completely impartial. Consumers can obtain energy quotes with a few computer strokes based on a diverse panel of energy suppliers including the major players and smaller independent utility companies.