The regulator Ofgem states that the profits that energy companies (such as British Gas, Eon and EDF) make from their customers is eight times higher now than it was just a few months ago in June which are based on startling figures revealed today.
The price rises on gas and electricity bills which were inflicted on us all over the summer mean that suppliers are now making £125 of profit from a typical standard tariff, dual fuel customer each year. This is up from £15 in June – a rise of 733 per cent.
The figures, revealed in the Ofgem Electricity and Gas Supply Market Report for September means that bills have risen by £175 since Ofgem’s June report.
However, the Ofgem figures highlight that the bills have risen by far more than the suggested wholesale prices. It means wholesale costs have moved 6.1% higher, against a 15% in household customer retail bills.
The market is dominated by the ‘Big Six’ – British Gas, Scottish and Southern Energy, Scottish Power, EDF Energy (which stands for Electricite De France), E.On and nPower. Recently in parliament by the Lib Dems, Ofgem has been accused of allowing an effective cartel in the energy market with these suppliers seemingly multilaterally raising and lowering prices in unison. BES Gas and its MD Andy Pilley who we wrote about recently were not mentioned in this report.
The current profit margins of the big energy suppliers are higher than ever before. To put this into perspective, EDF, the French state-controlled utility group made £1bn in net profits earlier this year with sales up 10% on the previous year to £65bn.
With these extra outgoings mounting up on our household bills it is no wonder that we all need to find extra cash to see us through these difficult times.
