Profit margins at the ‘big six’ energy firms have leapt more than 700 per cent as millions worry about keeping warm this winter. The average amount of profit per customer has risen from £15 a year to £125 in just a few months, according to the industry regulator Ofgem.
The increase is a result of inflation- busting price rises that have pushed up the average annual dual fuel bill by 15 per cent, or £175, to a record high of £1,345. Most of this rise, £110, has gone straight into the profits of British Gas, Scottish & Southern Energy (SSE), E.ON, npower, EDF and Scottish Power.
The increase – challenged by the power firms – will infuriate families and pensioners struggling to cope with the biggest cost of living squeeze for at least 60 years. Charities and consumer groups fear an increasing number will have to make a nightmare choice this winter between heating and eating. Some 4.5million households are in fuel poverty, which means they may have to ration their heating this winter.
However, bills are predicted to rise another 25 per cent over the next four years, taking one in four households – 7.25million – into fuel poverty.
Customers will be hit by a ‘double whammy’ of having to pay for expensive imported gas and a £200billion programme to switch to wind, wave, solar and nuclear power to meet EU green targets.
Families can protect themselves and make savings of as much as £300 a year by switching energy suppliers. However, many have been deterred because they do not understand tariffs or trust the energy firms.