by Michael Smith (Veshengro)
Ofgem, the British energy watchdog, has announced that it is to begin an investigation into energy companies after a 38% increase in prices since September.
The amazing thing is that they even have to ask after the price hikes by a number of the leading energy supply companies on the market, such as British Gas, ScottishPower and others.
The latest analysis of retail prices by Ofgem shows that the margin on a standard dual fuel tariff has risen from £65 to around £90.
In its Electricity and Gas Supply Market Report published recently, Ofgem finds that three of the Big 6 energy supply companies have already announced further price rises this winter. Only one supplier so far, EDF Energy has promised to freeze prices between now and March 2011.
Ofgem says it has no problem with firms making a profit but it wants to see clarity for consumers that the market is transparent and working as effectively as possible.
As part of the review, Ofgem will investigate the retail accounts it has recently received under new license requirements.
Ofgem's chief executive, Alistair Buchanan, said: "With Britain facing an investment bill of £200 billion over the next 10 years, consumers have the right to expect that the energy retail market is providing them with value for money.
"Our analysis published today shows and increase in company margins from £65 to £90 at a time of rising energy prices, which causes Ofgem to rightly ask if companies are playing it straight with consumers."
The regulator's investigation will assess the current state of the effectiveness of the retail energy market, review the companies' progress on implementing earlier reforms and report on retail and wholesale prices.
This review is due for completion in March next year, which means that this is going to be nothing more than cold comfort for those who will be faced with rising prices, which they may be able to ill afford.
Maybe it is time to end the private operations and get back to state-owned utility companies, whether gas, electricity or water. And the same also goes for public transport, whether trains or buses or Underground services, etc.
© 2010
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