That’s the noise coming from energy regulator Ofgem, who is becoming fed up of the yawning profit margins made by energy providers. Not only are profits high but they have expanded quickly in the last six months, it says.
For example, the average energy company’s gross profits – which don’t account for costs such as marketing and IT departments – were £210 per ‘dual fuel’ customer in November, up from just £160 three months before.
Alistair Buchanan, Ofgem chief executive, said the regulator’s role was “to ensure that companies can invest, but do not use investment as a shameful excuse to overcharge consumers”.
He also said that if suppliers’ profit margins continued to climb, “the consumer is going to start to lose out”.
Wholesale gas and electricity prices have dropped substantially since mid-2008, but prices at the consumer end had fallen only modestly – by an average of £70 per year for a dual fuel customer.
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