The UK consumer group Which? has asked the British Prime Minister to launch an urgent review of the energy market in reaction to the latest price increases.
British Gas, npower and Scottish Power all announced price increases as a result of rising wholesale gas costs.
Which? have said that average energy bills are 13% higher than last year and are one of the main financial concerns for consumers.
A year ago, the organisation organised a summit with the government, represented by the Department of Energy and Climate Change (DECC), energy suppliers and other consumer groups to help tackle energy issues. But, according to Which? very little has been done to assist consumers, and the new price increases mean consumers face tougher times ahead.
“We are calling on [David Cameron] to launch an urgent, expert, independent review into the rising cost of domestic energy bills and whether competition among energy suppliers can be made to work more effectively in the consumer interest,” Which? executive director Richard Lloyd writes in an open letter published today.
“The energy companies blame wholesale price increases but even the regulator has found that prices don’t fall when the wholesale price drops,” he goes on.
He also says there needs to be more transparency in the market, on pricing particularly as this is dominated by a few companies unaffected by the usual competitive pressure of price and customer service.
Ofgem’s proposals to overhaul the energy market are said to be insufficient to address the problem. “We believe a review must identify what reporting measures should be required of energy companies, relating to both the wholesale and retail markets and the costs of social and environmental policies, to increase transparency and give consumers confidence,” says Lloyd.
Which? say that a cap on standard prices should be set by the regulator to ensure fairness to consumers, but DECC have hit back at this saying that this would be unhelpful to consumers, as another inquiry would take too long to complete and implement.
“We know what the problems are, we want to get on with tackling them now,” said a spokesperson. “We have the Energy Bill due this autumn, and Ofgem is due to move to the next stage of its review before winter. In the meantime we’re offering practical advice to households on how to get energy bills down and keep their homes warm.”
Energy secretary Ed Davey wrote to all the MPs to offer energy saving tips for their constituents earlier this week.