Energy suppliers risk "undermining public confidence" in the market by failing to respond to falling wholesale prices, the regulator has said.
Ofgem said the "big six" gas and electricity companies should explain to customers why falling wholesale prices have not been passed on to household bills. Under one measure, wholesale prices are at their lowest level for four years. Wholesale costs make up nearly half of a household energy bill. British Gas, the UK's largest supplier, said this meant the wholesale price could fall, but this might not push down prices overall. "Our recent trading update demonstrated that these reductions in wholesale costs have most definitely not translated to increased profits for British Gas," a British Gas spokeswoman added.
Falling costsThe big domestic suppliers tend to buy energy in advance, in what is known as the forward market, in an attempt to avoid any short-term rises in costs......Read more here