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.

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