Energy bills should be £142 lower a year but gas and electricity giants aren’t passing on falling costs
Millions of households are paying an extra £142 per year, according to analysis of official data by Energyhelpline.com
ENERGY firms aren’t passing on falling gas and oil costs to customers and it means that bills should be £142 cheaper.
Suppliers’ gas and electricity costs fell by 23 per cent between January 2014 and March 2016.
The average gas and electricity bill in 2014 was £1,133 and it should have fallen by £209 by the end of last winter.
But the typical standard variable tariff fell by just £67 to £1,066 a year, meaning millions of households paid an extra £142 a year, according to analysis of official data by comparison website Energyhelpline.com.
In December, Ofgem published a league table revealing how millions of customers are on standard tariffs.
These tariffs are usually the most expensive and customers are automatically rolled onto them after finishing a cheap fixed deal.
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Mark Todd, from energyhelpline, said: “Ofgem seem to want to bury their head in the sand and deny there is an issue with the big supplier’s expensive standard tariffs.
“There’s a massive elephant in the room and rather than admit it they are trying to hide it under the carpet.
“As anyone who has ever tried to hide an elephant under a carpet will know; it’s a pretty tricky thing to pull off without someone noticing.
“Customer should avoid standard at all costs. They are almost always a rip off. Always opt for a cheap fixed rate for your energy supply and you’re likely to save £200 a year.”
HOW TO SWITCH ENERGY PROVIDER
MILLIONS of households across the UK have never switched energy providers and are languishing on standard variable tariffs, which are often the most expensive around.
Around 70 per cent of people are on bog-standard expensive standard tariffs, when they should be shopping around for a cheapest deal.
If in doubt, call your provider and call other providers to ask them what their cheapest fixed tariff is.
Better still, use a comparison website, like uSwitch or MoneySupermarket to find the very best deal for you. By switching providers you could save hundreds of pounds a year.
Bear in mind that the amount you pay for your energy varies depending on where you live
But Ofgem argues that suppliers are usually slower to pass on reductions in wholesale costs because of the way that the energy market works.
A spokesperson said: “Suppliers tend to be slower to pass on movements in wholesale energy prices to their customers on standard variable tariffs, in part because they generally buy energy on these customers’ behalf over a longer period of time than for customers on fixed deals.
“Nevertheless, our previous analysis, and that of the CMA, has shown that prices for most customers on standard variable tariffs are too high.
“We expect suppliers to offer the best possible prices to all their customers, or risk losing these customers to rival suppliers.”
An Energy UK spokesperson said: “There are many components which make up an average energy bill, with the majority outside of suppliers’ control.
“The impact of wholesale prices on an individual’s bill will vary depending on the energy company, and when and how it bought the gas and electricity it’s supplying.
“Wholesale prices have been increasing for several months now, and suppliers are facing additional policy costs, however most have not increased their standard tariffs”.
It follows an investigation by The Sun last year which exposed how much the big six energy firms are making profits seven times bigger than they claim.
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