The price of wholesale energy is now at a five-year low, yet the price of energy to consumers has remained roughly the same over the same period.
The ICIS Power Index, which analyses energy markets, have said that the mild winter and lower commodity prices have led to wholesale costs falling. They published a report recently with the conclusion that wholesale energy prices are at a five-year low.
Zoe Double, head of power at ICIS, said: “Current market prices for delivery two to three years ahead show that participants expect UK wholesale energy prices to remain low.”
And yet, the price consumers are paying for energy has not changed. SSE, one of the big six utility companies, this year announced that they will cut prices by 1.3 percent through 2016 within their Atlantic brand, while E.ON recently announced a 5.1% cut in their gas bills from February. But these cuts are paltry, compared to the cost of wholesale energy.
This has led to many people calling for change within the industry. Amber Rudd, Energy and Climate Change Secretary, in June last year urged the big six to lower their energy prices on the back of an investigation being carried out by the Competition and Markets Authority (CMA). It was later revealed that energy supplier’s profits had increased by a staggering 32 percent in 2015. It is thought by many that their profits will increase still through 2016.
The co-founder of Energy Helpline, Mark Todd, had this to say on the issue of energy prices to The Telegraph recently: “Energy companies could be doing much more to slash prices for consumers. Over the last two years, wholesale gas prices have come down 51 per cent and electricity has come down 33 per cent. It’s an absolute scandal that larger price cuts have not been passed on. Standard tariff customers are getting ripped off. Loyalty does not pay. The only way to get a proper energy price cut is to switch.”
Questions are now being raised by politicians who seek to use the current energy market as a tool to improve their own public perception. While Amber Rudd has the best intentions, many people believe that politicians are merely blowing hot air, with very little sway or indeed very little potential impact on energy prices.
The current state of the energy market is as such – prices are too high, and we are getting ripped off. It’s as simple as that. Change is needed. But when, and if that change ever comes, we’ll have been fleeced for a lot of money. Change really can’t come soon enough.