In the wake of Centrica’s interim management statement, customer champion Consumer Focus has said regulator Ofgem’s market reforms will be tested.
Audrey Gallacher, Head of Energy at Consumer Focus, said: “This is going to be an acid test of whether Ofgem’s inquiry has managed to discipline energy firms’ behaviour. Global gas prices are volatile, but Centrica will benefit hugely at the production end from higher wholesale prices.”
In March, energy suppliers were told that they must provide customers with at least 30 days’ notice before hiking their prices or making any other significant changes to their contract. The changes aim to increase competition among the suppliers and show more transparency over their methods of pricing.
Ms Gallacher said the measures were necessary to protect the consumer: “Ofgem has concluded that the energy market is fundamentally failing consumers, and one of the biggest problems is lack of transparency on pricing. Energy firms must step up to the challenge of proving to customers that they are paying a fair price. The regulator must keep the pressure on to make sure this and other much-needed changes happen.”
Earlier today Centrica warned of winter price increases: “In the UK, the forward wholesale prices of gas and power for delivery in winter 2011/12 are currently around 25% higher than prices last winter, with end-user prices yet to reflect this higher wholesale market price environment.”
The utilities giant also suggested they might close a North Sea oil field, after government-imposed tax increases.