Profit increase for energy firms

14/10/11

By Natalie Thomas

Energy companies are making an annual average profit of £125 out of every customer due to price increases, it has been claimed.

The energy industry's regulator, Ofgem, said that a typical dual-fuel bill has risen by £175 and by next month will total £1,345 due to price hikes.

Figures in June showed an average annual profit of £15 per customer among gas and electricity companies.

Ofgem predicts that profit margins will dip next year, but that the industry is still being affected by complicated tariffs, poor supplier behaviour and an absence of market transparency.

But the regulator hopes to push market reforms forward. Among its plans are a standard tariff based upon a unit price for the energy used, and a standing charge which it will set itself.

Wholesale prices have increased by 40 per cent, the regulator said, taking them up to £115 per customer over the past 12 months.

Suppliers have blamed the recent hike in tariffs on rising wholesale costs.