Energy firms come with whiff of rip-off

Britain’s energy companies have been cleared of operating a supply cartel following an investigation by the watchdog, Ofgem, which ruled that consumers have enjoyed lower prices, better service and wider range of deals in the 10 years since the industry was opened up to competition. All in all, a clean bill of health. What a different picture from that painted by the price comparison website uSwitch.com, which claims that the big six energy companies have ripped off the paying public to the tune of more than £3billion because they are buying in gas at almost half the 2008 price, but charging customers nearly a third more than they were two years ago. Unsurprisingly, the energy companies deny the accusation, saying that the comparisons with 2008 are unfair because they buy their gas many years in advance and the current price to the customer fairly reflects the wholesale price at the time they bought it.

The problem consumers have is that it is easier to nail jelly to a tree than to establish the facts of this matter. They have absolutely no way of knowing the price the energy companies paid for the gas – and electricity and oil for that matter – so, consequently, have no way of knowing whether they are, indeed, being ripped off at the moment. Ofgem alluded to this lack of transparency by calling for better financial reporting by the energy companies, but if Ofgem itself cannot or will not force more openness, who will? The government has shown itself woefully inadequate in taking on big business – as demonstrated by its lily-livered approach to the banks -and is highly unlikely to have the stomach for a fight with energy companies. In the absence of a true consumers’ champion, the whiff of a rip-off will remain.