Sunday, 16 October 2011

Energy Watchdog : Energy Firms' Profit Margins Up 700%

Recent price rises have helped energy suppliers increase their profit margins more than seven-fold, according to estimates by the UK energy watchdog.

Ofgem has calculated that annual profit margins per customer have risen to £125, from just £15 in June.

However, the watchdog expects suppliers' margins to fall back next year.

Ofgem told Sky News Online there were a number of factors contributing to the rise, including VAT, suppliers' operating costs and a 40% increase in the wholesale cost of gas over the last year.

The numbers were revealed as part of a review of reforms which aim to simplify the energy market and make it more competitive.

Under the proposals, standardised pricing information will mean consumers can avoid having to compare the 400 tariffs which currently exist.

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