UK households are being overcharged by as much as £140 a year for energy as the big six gas and electricity suppliers refuse to pass on wholesale price falls, it has been claimed.
The chancellor George Osborne has called on big British companies pass on the benefits of the collapse in oil prices to their customers, and warned a Treasury investigation into the matter will follow if they do not.
Petrol retailers have been accused of being slow to pass on the reductions at the pumps, but now the spotlight is falling on the big energy suppliers – none of whom have cut the standard tariffs paid by the overwhelming majority of households.
Price comparison websites said wholesale gas and electricity prices had fallen by around 30% and 15% respectively since the summer, enabling the small suppliers to offer new customers dual fuel bills below £900 for the first time. This compares to the £1,200 that customers on standard tariffs are now typically paying.
TheEnergyShop.com’s Joe Malinowski said if the price falls were passed on, customers would see bills fall by at least £140 a year.
He said he has never seen such large savings in cash terms available to those prepared to ditch their big six supplier, with those on standard tariffs able to save as much as £320 a year by shopping around.. The combination of the failure of the big firms refusal to cut standard bills and a host of great offers from small players has resulted in the largest price disparity since switching began, he said.
Tom Lyon, uSwitch.com energy expert, said: “While quick to pass on rising costs, the big six energy suppliers are yet to reduce bills for the majority of their customers who are on standard tariffs.
“It’s now high time for one of the big six to cut their standard prices and help hard-pressed households, and lay down the gauntlet to the others to do the same.”
Mark Todd at the rival switching site Energyhelpline.com agreed price cuts are now long overdue. “Suppliers appear to be putting profits before their customers. Customers are being punished for loyalty and milked for profits.”
According to data from TheEnergyShop.com, the difference between standard tariffs and the cheapest deals has never been greater in cash terms. A customer on a standard tariff with the big six switching to the cheapest dual fuel deal can save £249 a year if already paying by direct debit, or £328 if switching from a more expensive payment method. That saving is £100 more than the comparable saving 12 months ago.
However, the threat of a price cap by an incoming Labour government has been used as an excuse by the big six for failing to pass on cuts to customers.
Energy UK, which represents the big six energy firms, said its members were reacting to the falling oil price.
Lawrence Slade, chief executive of Energy UK, said: “Energy suppliers are passing on price cuts to customers. When people shop around they can easily find deals that are over £100 cheaper than this time last year following cuts in wholesale energy prices.”