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The big six are forming a monopoly
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‘Competition a Myth’ in Energy Sector
Writes Dan Drage dan.drage@consumerchoices.co.uk
As the energy sector comes under closer scrutiny, a comfortable monopoly amongst the big six suppliers is emerging.
According to statistics compiled by industry watchdog Energywatch, the number of energy companies competing for your custom has reduced from 20 to just the big six over the last decade. In some regions, only two of these six are in direct competition with each other.
Allan Asher, Chief Executive at Energywatch, wants what he sees as an unhealthy situation addressed:
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"Pre-payment meters should be called the ‘poor pay more' meters"
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‘There is a myth that there is vigorous price competition between the suppliers. For the main product they most actively sell, direct debit for dual fuel, gas and electricity, the price difference between the cheapest and most expensive is £30 a year; it's just a few pence a week.’
The topic of prepayment meters, passed around like a hot potato by energy suppliers over the last few months, was also high on Mr. Asher’s list of grievances. He says:
‘Pre-payment meters should be called the ‘poor pay more' meters.’
Mr. Asher was providing evidence at the first session of the committee's inquiry into Britain's energy markets, which was set up after a series of price increases that took average household bills for dual fuel to around £1000 a year.
Prices in Britain are rising faster than elsewhere in Europe, with electricity prices now the fourth highest and gas prices the 10th most costly.
Chris Eagle, Commercial Manager at Energy Choices, had the following to say:
‘Despite the big six seemingly holding a monopoly, it doesn’t necessarily follow that they’ll be making huge profits. Often the fuel companies operate inefficiently and with high costs, and the consumers are expected to bare the brunt of this.’’
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