61% of energy customers say desire for bigger profits behind price hikes

The vast majority of consumers believe there is too little choice in the energy market, with more than half thinking bigger profit margins were behind the recent price increases, according to a survey.

The research, which was commissioned by Co-operative Energy, said that 70% of consumers thought all energy companies were the same, with 63% fed-up with the big six operating an ‘oligopoly’. Meanwhile, 61% said a desire for bigger profits was the prime driver for the recent price hikes.

The vast majority of respondents (82%) said they wanted the government to step in and make it easier for new energy companies to enter the market, and 86% wanted to see the creation of a single wholesale energy market.

Ramsay Dunning, group general manager at Co-operative Energy, said, “This research supports our long held view that six companies dominating the energy market is bad news for UK energy users.

“The big six have a stranglehold on both the UK’s energy generation and supply, which makes it difficult for new, independent suppliers to enter the market. Consumers are deeply mistrustful of the industry and switching rates have fallen to woefully low levels.”

The Co-op announced in November that it would be reducing the energy price increase that it had revealed a month before, from 4.5% to 2.5%.

The firm said the two percentage point decrease was as a result of the government’s indication that it would be removing the mandatory Energy Companies Obligation (ECO) taxes on gas and electricity bills.

Speaking about its consumer survey, Dunning added, “UK energy policy is at a crossroads. We either continue to stick with a few large corporates and hope that they treat us fairly, or we engage in wholesale market reform and diversification. Small, independent generators and suppliers are more than up to the challenge – but we need government to be truly committed to allowing us to compete on fair terms.”

Further reading:

Energy bills to be cut by £50 after government shake-up

Politicians urged to focus on energy efficiency measures

Green energy firms Good Energy and Ecotricity break mould with winter price freezes

Utility bill increases here to stay, says National Audit Office