Energy Firms 'Don't Pass On Savings'

Energy companies are being accused of failing to pass on billions of pounds worth of savings made because of falling gas and electricity prices.

Suppliers have not passed on cuts in wholesale prices, watchdog claims

The watchdog Consumer Focus states the fall in wholesale prices has saved energy companies around £1.6bn but this has not been reflected in average domestic bills.

Energy bills rose by 42% last year with the average household paying £1,293 for the year.

Consumer Focus deputy chief executive Philip Cullum said consumers had feared suppliers had not passed on the full cuts in wholesale prices.

"Our new research for the first time shows the reality," he said. "The companies are pocketing £1.6bn extra while millions of households struggle to make ends meet.

The amount of gas and electricity a customer uses can form as little as half their annual bill

Garry Felgate, Energy Retail Association

"Energy firms should take immediate action to put things right. A failure to act, and to ensure that people pay a fair price for energy, could have serious consequences for the sector."

But Garry Felgate, chief executive of the Energy Retail Association which represents the industry, said the watchdog had made basic mistakes in its report.

He said: "The amount of gas and electricity a customer uses can form as little as half their annual bill.

"The remainder includes other costs, such as transporting gas and power and meeting the Government's carbon emissions reduction targets - all these costs have risen sharply in recent years."