Energy chiefs to be questioned over recent price hikes
29 Oct 2013
The big six energy companies will today meet with MPs at the Energy and Climate Change Committee, to explain the escalating prices of electricity and gas and to discuss how transparency can be achieved.
David Cameron said he was ‘frustrated about the big six’ and wanted to see competition in the sector increase.
Labour MP John Robertson, who will be one of the MPs at today’s meeting at the Energy and Climate Change Committee, agrees that energy prices should be more competitive. He believes that pricing strategies similar to those in our supermarkets should be adopted by the energy companies in order to increase competition. He said, ‘You have never ever seen an energy company take on the rest of its competitors to try to undercut them […] when one puts the price up, they all put the price up.’
The big six control 99% of the retail energy market, and it is expected that they will say that the price rises are mainly due to increased wholesale costs. However, Andrew Wright, the acting chief executive of the energy regulator Ofgem, is expected to tell MPs that wholesale prices have risen by less than the rate of inflation.
If it is found that price rises are more than the increases in their costs, Ofgem may be asked to investigate competition in the sector, with the aim of easing the financial strain for the consumer.
The regulator claims that energy prices have risen by 24% over the past four years, putting increased financial pressures on small businesses and households alike.