Despite cuts to energy tariffs the Big Six energy companies profits are expected to increase by up to £114 per household, according to Ofgem.
The latest supply market indicator (SMI) from Ofgem has taken into account the recent price cuts from the Big Six and some new cheaper fixed price tariffs that have been added to the market.
Ofgem said It said: “Our latest supply market indicator suggests the pre-tax margins of a typical supplier are likely to widen over the next 12 months as wholesale costs continue to fall sharply even when accounting for recent price cut announcements.
“If the market were more competitive you would expect suppliers to be competing more vigorously for market share in response to falling wholesale costs.”
Ed Davey, the Energy Secretary said that if customers aren’t getting a fair deal from their supplier they aren’t going to stay loyal to them.
He went on: “People want to see bigger savings on their energy bills – not bigger profits going to the Big Six.”
Energy UK brushed off Ofgem’s estimates, saying that they were “statistically biased and inaccurate”.