The energy regulator Ofgem says it will ban unfair pricing if energy companies do not speed up moves to slash gas and electricity bills.
Although the six biggest energy suppliers have nearly stripped £500 million from their customers’ bills, Ofgem is unhappy with their rate of progress and will now consult of proposals to ban unfair prices and “ensure consumer interests are more fully protected”.
The regulator’s probe into energy suppliers concluded on 1 December that energy suppliers must address concerns that bills have not got cheaper despite the cost of crude oil peaking at the end of the summer. Since the probe ended, the six big suppliers have taken £300 million off premiums paid by customers using pre-payment meter and £200 million off more than four million households who have been identified as missing the best deals.
But Alistair Buchanan, chief executive officer at Ofgem, says it is not enough and it will now consult on introducing new rules to end unfair pricing.
“We’ve seen progress but it’s certainly not the endgame,” he adds. “We demand more and quicker action for those customers currently losing out.”
The new six-week consultation will kick-off in January. Ofgem may also refer the issue to the Competition Commission.
But the Conservative Party has criticised Ofgem for not coming down harder on suppliers.
Greg Clark, the shadow energy secretary, says: "The Ofgem package brings no prospect of early relief for consumers who are struggling this winter.
“Global energy prices have collapsed yet British customers continue to see their energy bills at record levels."
Clark wants the Competition Commission to launch an urgent review into the issue.
“The way the big six energy companies set prices is surrounded by unnecessary mystery," he adds. "It is high time they said when prices will fall and by how much. The companies say they buy their stocks in advance but that should make it easier, not more difficult, to say when prices to consumers will fall."