In a statement made by an Ofgem spokesman yesterday, the regulator asked for ‘anyone with evidence that energy firms have conspired to raise prices to submit the information immediately’.
The accusation of anti-competitive behaviour and price fixing was made in a report by the Sunday Times and immediately denied by the Energy Retail Association. It prompted an swift response from Alistair Buchanan, Ofgem’s director general, who told Radio 4’s ‘Today’ program that:
"We have had no evidence presented to us that a smoke-filled room deal is being done by the large players."
Earlier this week, Ofgem's Mr Buchanan met the chancellor Alistair Darling to reassure him that there was no cartel or evidence of ‘collusive activity’ in the energy market that would artificially raise prices for customers. He told the chancellor that the sole reason for these price hikes had been the rapid increase of wholesale costs, including oil prices that have now reached $100 a barrel.
Ofgem maintain that customers have plenty of choice between suppliers, and that on a typical electricity bill the gap between the cheapest and most expensive supplier is currently £150.
Chris Eagle, Commercial Manager at EnergyChoices, speaks of unwritten rules above clandestine activity:
‘It’s an unwritten rule that as one energy supplier increases their retail costs, the others follow. The initial action by npower was perhaps taken because they have the most to lose from spiralling wholesale costs, and it gave the green light for the other energy suppliers to fall in line. None of the suppliers want to be in the headlines for the wrong reason. Once all the major suppliers have upped their prices, consumers will be able to reassess their current deals and switch if necessary’
