Energy Costs down, but Your Bills up: Thanks Tories
Energy costs have halved but consumer bills are rising, providing supply companies with billions in extra profits thanks to the privatisation policies pursued by both Tory and Labour regimes.
The six big power suppliers (British Gas, E.ON, EDF Energy, RWE, Scottish and Southern Energy, and Scottish Power) have told energy regulator Ofgem that customers could not expect price cuts despite their soaring profits.
Some went so far as to say that prices would actually increase.
Ofgem asked the companies for reductions after its research revealed that they will be earning £170 profit from each dual-fuel customer over the next year — up from an average of £110 a year over the past three years.
The big six companies will earn an estimated extra £3.4 billion in profit over the next 12 months if they fail to pass on decreased energy costs to consumers.
Ofgem said Scottish Power has increased dual-fuel prices by 148 percent since 2003 but had cut its prices by just 0.6 percent this year.
The insane profit margins are the direct result of the Tory policy of privatisation which was then carried through with increased vigour by the Labour Party.
According to consumer rights organisation spokesman Robert Hammond, these privately-run companies are already overcharging consumers by around £100 a year and average gas and electricity bills hit an all-time high of £1,300 a year in 2008.
Recently, the cost of wholesale power on the international markets — where British Gas and EDF buy at least 60 percent of their supplies — has declined sharply.
It was this decline which prompted Ofgem to write to the companies asking them to lower prices to give hard-pressed British households a financial breathing space.
All of the companies wrote back to Ofgem, dismissing the request. Phil Bentley, managing director of British Gas, wrote in his answer that “Prices are likely to remain at historically high levels, and in fact [are] likely to increase as noncommodity costs rise ever upwards.”
Paul Golby, chief executive of E.ON, said he did not believe there was “a clear message regarding future wholesale costs movements that can be communicated to customers.”
Nick Horler, chief executive of Scottish Power, said: “There are no immediate signals that would indicate a fall in retail prices for this winter, and risks of an increase next year.”
Ofgem’s most recent quarterly report on power prices showed the wholesale cost of electricity had fallen by more than £7 per megawatt hour over the last six months. This is equivalent to £29 on the average annual bill.
Ofgem also revealed that gas wholesale prices dropped by an average of 10p per therm, or £59 for each customer bill.
Ofgem also predicted further wholesale price falls, by around £25 per customer for electricity and £40 for gas over the next quarter.
* The British National Party is committed to taking back our national assets from these profiteers and returning the utility supply institutions to a non-profit basis which serve the interests of the British people and not foreign shareholders.
