Amid concerns that energy companies are enjoying widening profit margins at the expense of their customers, Ofgem has announced that it will launch a review into the retail energy market.
With British Gas, Scottish and Southern Energy, and Scottish power all announcing price hikes in recent weeks, resentment has been growing as many home owners struggle in a difficult economic climate.
This Tweet sums up the general feeling nicely:
Ofgem to look at gas and electric prices … I know family’s that can not afford to stay warm now… how much do they think we will take?
While many have welcomed Ofgem’s decision, there has also been significant scepticism in terms of what the review will mean in reality. In truth, this is not the first time that the market has been investigated in this manner, and as a spokesperson for Energy UK said today:
“The review is the latest in a long line of investigations into the energy market in recent years and no previous investigation has found anything to concern the competition authorities.”
While Sara Vaughan, head of energy policy at Eon, today heralded the beginning of a new era of ‘interactive relationships’ between energy companies and their customers, consumer groups are more sceptical.
As Adam Scorer of Consumer Watchdog pointedly stated, energy companiues “do not feel the hot breath of competition on their necks”. With the market closed to new entrants as a result of the dominance of the ‘big six’, market structure rather than conspiracy and cartels seem to be to blame for consumers’ current predicament.
If this is the case, then Ofgem’s investigation will merely provide lip service to the public’s bitterness, and could ultimately prove a further irritation rather than a solution. Watch this space.