Small energy firms warn new rules for price comparison websites will PUSH UP gas and electricity prices for everyone
New rules mean that price comparison website will only have to show those tariffs that make them money
ENERGY prices will go up if plans to relax rules for price comparison websites go ahead, a group of small suppliers have warned.
Regulators have been working on plans to shake-up the energy market, including allowing price comparison websites to only show the deals from gas and electricity suppliers that make them money.
A group of small energy suppliers - GB Energy, Bulb, Go Effortless, Zog Energy and So Energy - think this would lead to an increase in prices because it means that price comparison websites would no longer have to list every deal.
These websites are a great way for people to save money as they help you compare the cost of energy, insurance, credit cards, loans and and many more financial products.
Small energy firms often appear at the top of list when it comes to price.
This is because they are able to undercut tariffs offered by big suppliers because they have smaller overheads.
In the past price comparison websites have refused to say how much they earn from suppliers, although it is thought to be around £40 per fuel.
This means that they make about £80 from each customer that switches.
Small suppliers are worried that if they are forced into paying price comparison websites to appear on their listings then this will put up their prices.
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This has been supported by research from the Centre for Economic and Business Research.
It was commissioned by GB Energy to review the rules and it concluded that small energy firms would not be able to compete with the amount of commision that big energy suppliers pay.
Luke Watson, managing director of GB Energy, told The Sun Online: “We think that price comparison sites wanting to show only a few selected deals should give customers a clear warning up-front that cheaper offers are being screened out.
“I also believe that the sites need to be completely transparent and show people how much of a cut they’re taking for each and every switch.”
However, the regulators - Ofgem and Competition and Markets Authority (CMA) - think that by shaking up the rules it will allow customers to find the best deal and they say that it could increase competition and drive down prices.
A spokesman from the CMA said: “Energy customers benefit most from price comparison websites when they actively help them find the best deal.
I also believe that the sites need to be completely transparent and show people how much of a cut they’re taking for each and every switch
Luke Waton, GB Energy
“This can be by competing with each other to offer the cheapest prices - or promoting the benefits of switching, just as you see with other sectors like motor insurance.
“However, when it comes to energy, the current rules don’t give PCWs the incentive to attract customers in this way or to try and beat each other on price.
“We want this to change so that people can find better deals more easily.”
A spokesman from Ofgem said: “We want more competition in the energy market to drive down prices and drive up customer service.
“We agree with the CMA that moving to a world where price comparison websites are competing with each other and against suppliers to offer a wider choice of bespoke deals is in the long term interests of consumers.”
The rules, which part of recommendations made by the Competition and Markets Authority (CMA), are currently being debated by Ofgem, the regulator and energy firms.
The talks will stop tomorrow before Ofgem makes a final decision on the new rules, before announcing them later this year.
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