The Strategist

Government Investigates The Major Energy Firms In U.K. For Reduce Retail Price

06/08/2015 - 08:04

United Kingdom’s new government step in to provide a concessional price for electricity and gas by giving ‘price-call’ notice to the major six energy firms of the country. – 06 June 2015 – B.B.C. News reports that the new government of the United Kingdom is exercising pressure on the countries “major energy suppliers” on their sale rates. In this regard, Ms. Amber Rudd, U.K’s energy secretary, reveals that she discussed and gave a written note to the “big six” energy suppliers of the nation, inquiring about their prices whether the latter was “reflecting companies' costs”.
Furthermore, B.B.C news stated that one such group of consumer reported that firms failed to reduce the prices further whereas they ran “out of excuses” to not do so; although “the energy companies” claim that they operate in a market that is “highly competitive”.  In fact, Ms. Rudd was quoted from a letter by B.B.C which says:
"In light of the greater regulatory stability we are providing and continued stability in wholesale gas prices, I believe that energy suppliers should be seeking to regain the trust of consumers by reflecting this in their pricing decisions".
Moreover, the “Ofgem” regulatory body informed that electricity rates and the prices of “wholesale gas” remain “£80 lower than their estimated level a year ago”. The results of the “General Elections” has destroyed the “possibility of a price freeze”, earlier suggested by “the Labour Party”. In fact, the energy-company, S.S.E, reported a forty percent increment in their profit margin although they lost “more than 500,000 customers” within a year’s time.
Below is a table produced by B.B.C news, wherein all the “big six” energy firms are enlisted with their revised rates:
Major energy suppliers' price changes
Supplier Change Date of change
E.On Gas: down 3.5% 13 January
British Gas Gas: down 5% 27 February
Scottish Power Gas: down 4.8% 20 February
Npower Gas: down 5.1% 16 February
SSE Gas: down 4.1% 30 April
EDF Gas: down 1.3% 11 February
The C.M.A, investigating the market requirement of energy supplies, reports that if the customers seeking electricity and gas shifts over “to new products or different suppliers”, they could cut down on their respective bill amounts. As per C.M.A. the savings of the customers who failed to retrieve the said amount ranges “from £158 to £234” annually. An executive director of a consumer group, Richard Lloyd says:
"Energy firms have totally run out of excuses for not cutting our bills.
"It is good that ministers are acting but we now need to see suppliers do the right thing, and fast. If they don't play ball it will add weight to the case for the competition authority to step in and force the energy firms to make bills fair."
Nevertheless, the entire results of the C.M.A investigations are still to be brought forward, whereby a spokesperson of United Kingdom’s energy sector, representing the major energy firms, informs that:
"More companies are entering the market and by shopping around customers can find deals that are both cheaper than this time last year and which match individual circumstances.
"Our members will be replying to the Secretary of State in due course and the industry as a whole is keen to work constructively with the new government to ensure energy security at a price everyone can afford."