E.on, the energy supplier, is to cut prices. Good news for the consumers both domestic and business? Which? the consumer advocacy organization while welcoming any price reductions, points out that E.on will be followed by all of the other five energy suppliers. The UK energy supply market is an oligopoly with the main players doing a ritualistic dance consisting of price hikes when the wholesale price of electricity and gas goes up and smaller delayed reductions when the wholesale price drops.
Which? are campaigning for more transparency and competition in energy price setting. The six energy suppliers on the UK, E.on UK is just one of them. All of these companies profit hugely when wholesale prices drop. Indeed British Gas has transferred £349 million to its holding company, Centrica. Gas and electricity rates are 50% lower now than they were a year ago but prices charged to the consumer are not. There always seems to be mitigating circumstances that prevent the energy companies from passing on wholesale price reductions. However the increases are passed on immediately and in full.
The key question for Which? on behalf of all consumers is, are the energy companies treating their consumers fairly? The answer to this question is that there is no way of knowing. The energy market is simply not transparent.
OFGEM is the independent official watchdog of the energy industry. This organization focuses on the National Grid, Elexon and Energywatch. This last is supposedly the independent watchdog for the energy supplying companies. The aim is to consumer friend and advocate with best advice and second level complaint handling. All clear then? Well unfortunately no, because Which? is receiving a continuous stream of complaints and correspondence around energy supply issues.
In the meantime, every household in the UK is striving to keep up with very high energy prices and stay warm in the cold months of the British climate (June, July and August). If every household in the UK immediately switched to E.on as the latest company to cut prices and then did the same again when the next energy supplier offers a lower price deal and so on, then perhaps the energy companies would begin to act as though in a truly competitive market. Every household should use the price comparison websites to find the best deal for themselves and enforce competition on the likes of E.on.