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MSE News: Energy firms told to pass on price cuts by the Government

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in Energy
Energy firms are facing increased pressure from the Government to pass on a fall in wholesale costs ...
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Energy firms told to pass on price cuts by the Government

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Energy firms told to pass on price cuts by the Government

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Remember the reaction of the energy companies - to hold off reducing prices because of the risk of having them frozen?
All back to normal now - their Conservative friends are back in power again, so no need to do anything. Great! :rotfl:
Npower were the only supplier to make that claim, no one else did. Although anyone with any sense would agree with npower.
Gas wholesale is still falling but electricity non energy costs are rising so although gas should decrease by ~5% there is also the chance of a small electricity rise.
I'm fairly confident we'll see gas reduction announcements from the big 6 before the winter. However the industry will be waiting for the CMA investigation outcome (due in the next few weeks) before deciding what and when to do next.
I am always amazed at the massive variations in standing charges even from the same company. It is the same gas or electricity so how can a company say it costs more on one tariff than another? (ignoring green tariffs and such)
It would make comparing tarrifs a whole lot easier too as you would only have to compare the kwh price.
The other point I would make is despite us having private companies providing this we have some of the cheapest energy prices in Europe. Think yourself lucky you are not in Spain were you pay a 5% tax on the bill and then they add 20% VAT on top of all of that.
I haven't seen the breakdown recently but the suppliers profit margin is less than the likes of Tesco etc.
4 Credit Card and 1 Loan PPI claims settled for £26k, 1 rejected (Opus).
Energy suppliers face fixed costs, these don’t vary with consumption. This is what standing charges are meant to cover. A portion of the fixed costs are fixed with all supplier being charged the same amount in each region, but they vary by region. Suppliers with a dominant position in cheaper regions face cheap fixed costs when spread over there whole portfolio. These costs also vary by month and year, so a short term fix may have a different averaged fixed cost to a long term fix.
Then of course there are the suppliers own fixed costs, these vary wildly for example suppliers based in the south will generally have higher opex costs than those based in the north due to building and labour costs. Some suppliers spend a lot on marketing others don’t. There is no fixed rule for what fixed costs should be included in prices and what shouldn’t.