subject: Will Ofgem's Latest Investigation Bring About Lower Energy Prices? [print this page] Will Ofgem's Latest Investigation Bring About Lower Energy Prices?
There are many reasons why Britain's energy prices are on the rise, from the increasing scarcity of fossil fuels to the import charges of natural gas and crude oil from Europe and the Middle East. However, a recent investigation by energy industry regulator Ofgem has sparked new hopes for UK consumers, with the apparent discovery that energy companies have reaped profits of 38 per cent.
If energy companies are earning substantial profits without passing these benefits on to their customers, this is cause for concern for the energy regulator - which found that profits from one firm's dual fuel tariff have increased from 65 to 90 over the last few months. In the face of existing scepticism from customers over the price hikes imposed by a number of Britain's major energy suppliers, such information would likely cause further disappointment, and encourage consumers to look elsewhere for their utilities.
Several years ago, prior to the worst of the energy crisis, it wasn't uncommon for households to remain with the same energy supplier for many years - sometimes even decades, in the case of longer-running firms - without investigating alternatives. Recent price hikes have made such brand loyalty largely into a thing of the past, as more energy customers are now finding themselves increasingly dissatisfied with rising prices for their gas and electricity bills.
Ofgem's investigation promises to look 'behind the numbers' to discover the real reasons behind the increase in energy prices charged by Britain's seven major energy suppliers, which some are hopeful could lead to a drop in fuel costs over the next few months. The overall aim would be greater transparency, which should serve to make consumers more satisfied with the service provided by their utility companies.
On the other hand, many people are more concerned with Ofgem itself, and other regulators and government agencies, which they feel have not taken sufficient action to step in until the situation reached its current levels. If the regulator succeeds in limiting price rises or securing fixed rates for a certain term, this could serve to renew public confidence in the industry.
Such agreements could also be to the benefit of energy companies, if they are able to spend profits and government investments on upgrading the current infrastructure and improving energy delivery systems on regional and national networks. Such improvements could help to permanently lower the cost of energy for British households.
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