Gas and electricity Updated:
Consumers have been warned they are unlikely to see any cuts in their energy bills over the coming year, despite profits for the energy firms seemingly set to rise.
In its latest quarterly report, the gas and electricity regulator, Ofgem, has estimated energy suppliers stand to make a gross margin of around £170 from a dual fuel customer over the next 12 months, up from an average of around £110 over the last three years.
The gross margin includes profit as well as the operating costs of the supplier such as staffing, sales and IT costs.
However, when asked by Ofgem to explain their pricing position to their customers, the response of the firms was less than encouraging.
The largest supplier, British Gas, said prices were likely to remain at historically high levels, and could in fact increase if its non-commodity costs continued to rise.
A similar stance was taken by Scottish and Southern Energy, which said: "With forward annual wholesale prices significantly higher, and with upward pressures in terms of distribution, environmental and social costs, seeking to avoid an increase between now and the end of 2010 is an important goal."
Scottish Power said there were no immediate signals that would indicate a fall in retail prices for this winter, and risks of an increase next year, while RWE claimed a potential fall in wholesale costs needed to be weighed against increases in other costs.
E.ON remained sat in the fence, saying it did not believe there was a clear message regarding future wholesale costs movements that could be communicated to customers.
The only small glimmer of hope came in the response from EDF Energy, claiming it would be prepared to reduce tariffs if market conditions allowed.
With colder weather fast approaching, the news makes it essential that consumers are on the best gas and electricity tariff possible.
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