Our latest analysis of energy prices suggests bills could have been slashed further and sooner than the recent round of cuts. Do you think you’re paying a fair price for energy?
The Big Six have each announced price cuts to standard gas tariffs of up to 5.1%. We weren’t convinced these cuts went as far as they should, so we analysed movements in energy prices. You may not be surprised to hear that we found the price you’ve been paying hasn’t been in line with falling wholesale costs. But by how much?
Energy price cuts don’t go far enough
Using real market data, we analysed the cost to suppliers of buying wholesale energy since 2013 and compared this against what you’ve paid in the same period. We found that the failure of retail prices to align with wholesale costs has cost consumers £2.9bn over the last year – that’s £145 per household on standard energy tariffs.
Despite the recent cuts to gas prices, we think they could have been slashed by around 8.8-10.3%. And electricity prices should have seen a reduction too, by up to 10%.
We also see no justification for the price hikes in late 2013 – if they hadn’t gone up customers could have saved £421m on gas prices alone.
Energy market investigation
All of this places a massive question mark over how suppliers have been setting prices over the last two years. We have submitted our analysis as fresh evidence to the ongoing Competition and Markets Authority investigation into the energy market, and to HM Treasury for its more recently announced inquiry into oil prices.
As part of our Fair Energy Prices campaign we want the CMA enquiry to establish once and for all whether the price we pay is fair and set out radical reforms to ensure the energy market works for consumers.
So what are your thoughts on this? Do you think we’re paying a fair price for energy? Does the CMA need to examine this as part of its energy market investigation? Over to you…