Several newspapers are reporting the disproportionate rise in profits being made at the expense of consumers who are not fully benefiting from the 28% drop in wholesale gas prices over the past year.
The average annual household bill has reduced by 4.4% in the last year, equating to £60, and experts suggest that if the reduction in wholesale gas prices was passed on in full to millions of customers, it would mean an average reduction in annual bills of more than £140.
Ofgem said the average profit per household was £114 in the past 13 months – up from £77.
The news justifies the concerns of consumer groups, industry analysts and politicians that unreasonable prices are putting an intolerable strain on household budgets this winter.
Dermot Nolan, Ofgem’s chief executive, said this week that rising profit margins were “clearly a cause for concern” and that the competition regulator should take the figures into account in its continuing inquiry into the market.
Gillian Guy, chief executive of Citizens Advice, said: “The inadequacy of recent energy price cuts is now clear. Low wholesale costs are allowing energy companies to increase profits whilst barely cutting energy prices. The ball is now back in the energy firms’ court to actually compete with each other on further and deeper price cuts. Households that are struggling to pay their bills will rightly be angered that falling wholesale costs are being passed on more quickly to shareholders than customers.”
Home heating oil prices are different in the way that prices are levied to the consumer in that they are dictated by the daily price of oil from the supplier and, as such, prices change very quickly and the savings are passed on to the customer within a shorter timeframe than say gas and electricity suppliers, whose costs are dictated by bulk purchases that are made many month’s previous in some cases.
For the latest home heating oil prices you can use our quote form at the top of each page. The price you are quoted is the price you will pay. New or existing customers can also ask any questions to our representatives. Please contact your local depot and we will be happy to help.