Big 6 Big Profits Controversy
The Sun Newspaper accuses suppliers of hiding extortionate profits
The Sun newspaper has claimed that energy suppliers are making six times more profit than reported by the suppliers.
The claim is based on a report from accountancy firm PwC on behalf of Energy UK, an industry body representing power firms. The report shows that the cost to suppliers of supplying energy, and running and maintaining call centres and power lines, amounts to £844 per year. Meanwhile, according to industry regulator Ofgem, 66% of customers are on standard tariffs, paying on average £1,066. This leaves a profit margin of £222.
Ofgem has stated that suppliers make a profit of 4.3%, or £46 on a standard tariff, a stark difference from The Sun’s claim. Energy Secretary Greg Clark has said he will examine the evidence and will call for a meeting with Energy UK to discuss the report’s findings. "This report appears to confirm my concern that the big energy firms are punishing their customers' loyalty rather than respecting it," he said.
The best way to save and keep suppliers from making extortionate profits off you is to switch to a cheap fixed tariff. An Ofgem spokesperson said "Suppliers do make higher profits from customers that remain on standard variable tariffs than those on fixed deals," "That is why we are working to make it quicker and easier for consumers to shop around and get a better deal.".
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