Price gap between best and worst energy tariff widens
24th July 2017 | Residential Energy
The gap between the best and worst energy tariffs offered by the big six suppliers has widened by more than half since a round of price hikes over the winter. The difference between the firms’ cheapest fixed deals and their most expensive ones, standard variable tariffs, jumped from £70 last November on average to £109 in June, according to challenger supplier Bulb.
Standard variable tariffs landed the big six in the crosshairs of Theresa May, who promised to impose a price cap to address the “injustice” of families collectively paying £1.4bn over the odds because of the gap.
While plans for a cap have been hugely watered-down, the new figures could provide fuel for Greg Clark, business secretary, and Ofgem, the energy regulator, to take stronger action.
A spokesman for the Department of Business, Energy and Industrial Strategy said, “Energy customers should not be punished for their loyalty … We now want to see suppliers playing their part and supporting the regulator to deliver a fairer deal to customers on poor value tariffs.”
Bulb found that the gap, which it calls a “loyalty fee” because customers roll on to standard variable tariffs if no action when fixed ones end, had widened the most at Eon. One of the worst examples in June was the £328.98 chasm between Npower’s cheapest deal and standard variable rate, for customers in Greater London.
However, British Gas had no gap and EDF had actually narrowed the differential since November. All of the big six, apart from British Gas, hiked their standard variable tariffs in the past six months. Some, such as SSE, have lost hundreds of thousands of customers as a result.
Hayden Wood, co-founder of Bulb, which has around 60,000 customers, said, “I’m disappointed that so many energy companies are still putting profits first and customers last. They shouldn’t just lure customers with teaser rates and then hit them with price hikes later. It’s just not right.”
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