Big energy profits = big bills for consumers - Gas and electricity - News - Moneyfacts

News

Big energy profits = big bills for consumers

Big energy profits = big bills for consumers

Category: Gas and electricity

Updated: 26/11/2013
First Published: 26/11/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A report released by Ofgem has revealed that the big six energy firms saw profit margins in the supply of gas and electricity rise by 77% in the last financial year – and that's before the latest spate of price rises hit consumers.

According to the research, supply profit margins reached an average of 4.3% in 2012, up from 2.8% in 2011, which equated to supplier profit per household rising from £30 in 2011 to £53 last year – an increase of £23, or a whopping 77%.

This revelation will only add to the anger consumers are feeling towards energy companies, particularly after all but one of the big six have announced price hikes which will see bills rise even more.


Big Six UK Gas & Electricity Profits 2011 & 2012 – Household and Business Markets

Year

Generation

Supply

Total

2011

£3.9BN

£1.25BN

£5.15BN

2012

£3.7BN

£1.6BN

£5.3BN

Increase 2012 on 2011

£0.2BN (-5% i.e. DOWN)

£0.35BN (28% UP)

£0.15BN (3% UP)

Sourced: energyhelpline Nov 2013

Mark Todd, of independent comparison website energyhelpline, commented:

"… it is a bitter pill for consumers to swallow, particularly when cash-strapped households are having to scrimp and save to pay their energy bills.

"If it were only profits that had risen then UK households would be more understanding. Quite rightly consumers are asking where these profits come from given times are so tough."

Meanwhile Citizens Advice found that suppliers have increased their prices by 37% over the last three years alone, meaning increases are running eight times faster than earnings and only adding to the difficulty a lot of consumers are facing.

If you're struggling with the cost of ever-increasing energy bills, all might not be lost – there's still time to switch supplier before many of the price hikes take effect, so make sure to compare energy tariffs before it's too late

What Next?

Save up to £320 on your energy for your home

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

British Gas freezes standard energy tariffs

British Gas has announced that it’s freezing its standard gas and electricity tariffs for the winter, ensuring that customers needn’t worry about price rises in the chilly months ahead. But is that enough to ensure households aren’t paying too much?

Living in a new home could cut fuel bills by half

Older homes will always be slightly more expensive to heat, with less insulation and sneaky draughts making these character-filled homes harder to heat efficiently. But did you know just how much more this could cost you? It could be double…

Standard energy tariffs are “fundamentally unfair”

We all know how expensive energy bills can be, particularly at this time of year when we’re all turning the thermostat up a notch. But what if you’re paying even more than you should be? If you’re on a standard tariff, that’s a very real possibility.
 
Close