Minister puts energy firms’ gas profits under the spotlight

10th February 2014

img

The energy secretary, Ed Davey has called on the energy watchdog to investigate the profits being made from gas sales by the UK’s so-called ‘Big Six’ energy suppliers.

The Liberal Democrat has asked the regulator Ofgem, to look into the matter and has also contacted the Competition and Markets Authority. He has asked them to examine all possibilities “including a break-up of any companies found to have monopoly power to the detriment of the consumer” according to a BBC News report.

According to reports, Mr Davey said British Gas, which has a strong-hold over some 41% of the energy market, “has tended to charge one of the highest prices over the past three years”. He asked that regulators look into the whether the Centrica owned company, should be broken up.

In a letter to Ofgem he wrote “The gas market has little vertical integration and analysis of the profit margins of the energy companies shows that the average profit margin for gas is around three times that of electricity. For some companies the profit margin is actually more than five times the average profit being made on supplying household electricity.”

Davey told the BBC: “This is a significant issue for consumers out there who are struggling with their energy bills.”

He urged that he wanted to make it easier for consumers to change supplier, pointing to the highlighting the 15 independent suppliers, which currently challenge the “big six”, which includes British Gas, EDF Energy, E.ON, Scottish Power and SSE.

Leave a Reply

Your email address will not be published. Required fields are marked *