Those impartial chaps over at price comparison website uSwitch.com have informed us that those pesky energy firms are holding off on giving us price cuts...apparently we could all be losing out on up to £200 a year because they are failing to pass on cuts in wholesale prices!!
The Energy Retail Association (ERA) said that when wholesale prices went up sharply in 2005 and 2006, power firms did not pass it all on to us the customer (now there's a surprise!).
Last year, energy regulator Ofgem warned firms not to be slow in passing on wholesale price reductions.
uSwitch calculated that household energy bills rose by £277 on average during 2006. But increasing supply has led to a fall in wholesale energy prices (the price at which firms buy their power which they then sell on to us customers) to levels last seen in late 2005.
But in recent times energy firms have only moved to cut prices by an average of just £76, uSwitch added. In effect, this means that much of the increase in consumer bills in 2006 is being held onto by our energy suppliers, even though wholesale prices have fallen to pre-2006 levels.
"It's not unreasonable to expect some generous reductions now that wholesale costs have fallen," said uSwitch spokeswoman Ann Robinson (not the Ann Robinson surely?). "Instead, suppliers are handing back a derisory £78 and are using smoke and mirrors to obscure the fact that they are still pocketing an extra £200 per household," she added.
But the ERA vigorously denied that firms were treating customers unfairly (well they would wouldn't they?): "The huge increases in the wholesale price over the last three years still haven't been passed on to customers, which is why there is this delay in any decrease," said ERA chief executive Duncan Sedgwick.
Last September, when wholesale prices had been falling for a few months, the regulator, Ofgem, said it would take tough action on any energy company not passing on these price cuts.
So come on then Ofgem; what are you waiting for?
Make the energy companies pass on the savings to us! After all, they can afford it!