As half of Britain’s 26 million receive their record quarterly gas and electricity bills this weekm, the government has ruled out an inquiry into the “discrepancy” between rising household energy bills and falling wholesale costs. According to the price comparison site Energyhelpline, the average household dual fuel bill (gas and electricity) will be £532.70 for the last three months, up £57 on the record £475 for the same period last year.
Junior energy minister David Kidney conceded there had been “sustained price rises” for consumers since 2004 but he said a referral to the Competition Commission would “delay investment in the UK’s infrastructure.”
Government projections show one in four homes now in fuel poverty. Households forced to spend more than 10% of their income on energy bills are considered to be fuel poor.
There were an estimated four million households in fuel poverty in the UK in 2007, the most recent year figures were available – double the number in 2004..Though energy companies did cut bills a touch last year the reductions were not enough to offset the coldest winter for 31 years, which forced millions of consumers to turn up the thermostat on their heating. People are now facing up to the chilling reality of a combination of the coldest winter in 31 years and high retail fuel costs.
The average dual fuel energy bill, on an annual basis, is £1,230, according to Ofgem, the industry regulator. This is 6 per cent cheaper than a year ago, when they hit a record of £1,303, but considerably higher than the £912 average of two years ago.Campaigners have argued that over the 18 months, though bills have fallen by 6 per cent on average, wholesale energy prices – the price the suppliers have to pay for their supply – have fallen by 50 per cent and that consumers have not enjoyed nearly enough of this benefit.
A Commons motion tabled by Labour’s John Grogan (Selby) calling for an inquiry into the relationship between wholesale prices and retail prices offered by the “Big Six” energy suppliers – British Gas, E.ON,EDF Energy, npower, Scottish and Southern, and ScottishPower – has so far been signed by 135 MPs.
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