Ofgem’s chief executive, Dermot Nolan, has told the BBC that domestic energy prices should be cheaper “for the vast majority of people.” This is despite 3.8 million households switching their energy supplier last year in what is thought to be an extremely competitive market.
According to market information provider ICIC, wholesale prices have fallen to a five-year low, at £36.76 per megawatt hour. Yet, according to Ofgem, (the government regulator for the gas and electrical markets, many customers who are on variable contracts are not seeing a corresponding fall in their bills.
Nolan said on BBC Radio 4’s Today programme that customers were being charged more than they should because they were “not facing strong enough competitive challenges.”
The Competition and Markets Authority (CMA) is now investigating, and is due to set out its final recommendation at the end of January.
Nolan added that for now, the best thing consumers can do is to switch to a better deal if they can get a cheaper deal elsewhere.