A comparison of prices from 18 months ago, combined with British Gas' profits for the year to date, show that energy suppliers have little pressure to compete with each other on price.
Energywatch announced today that our gas bills rose 94% and electricity bills 60% in the three years to 2006. Since then wholesale gas prices, which is the single biggest factor behind the increases, have collapsed by 50% but the price we pay has dropped by just 15%.
Xelector, which powers our excellent gas and electricity comparison service, says that British Gas has taken prices back just 18 months to the start of 2006, despite the wholesale prices falls since then.
Consumers are still paying inflated prices, as British Gas' profits show. Centrica (which owns British Gas) has just announced that British Gas Residential's profits for the first six months of the year have soared to £533 million from a loss of £143 million in the first half of last year. According to Centrica's own charts, this is despite the fact we've used less gas and electricity in the first half of this year compared to last year.
Allan Asher, Chief Executive of energywatch, said: "UK consumers continue to pay among the highest prices despite us having what is supposed to be the most competitive market." And I'm sure he's right. It's hard to believe the energy market is all that competitive if suppliers can get away with such meagre cuts in the prices we pay.
There's not much we can do individually to improve that situation. The best we can do for ourselves is to get off our providers' standard tariffs, which tend to be more expensive. British Gas has a much cheaper online tariff, as do most of the other big suppliers.
Furthermore, if you haven't switched for a year, you should take advantage of the latest deals by comparing tariffs.
One day, we might be able to write some good news about energy. Us Fool writers will be fighting over that article!
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