LONDON (Reuters) - Most British energy customers who have not switched supplier and/or tariff have missed out on saving up to 234 pounds a year, a watchdog’s report on competition in the industry showed on Wednesday.
The Competition and Markets Authority, in an update on its investigation into energy retail, said Britain’s liberalisation and heavy regulation of electricity and gas had influenced competition and several issues would be probed further.
The CMA highlighted issues that were likely to become the focus of its probe, and whether there was an adverse effect on competition in the supply or acquisition of electricity and gas.
From the first quarter of 2012 to the second quarter of 2014, the average saving for over 95 percent of dual-fuel customers of the “big six” energy firms was between 158 and 234 pounds a year if they had switched supplier and/or tariff.
Between 2009 and 2013, average domestic electricity prices increased by 24 percent and average domestic gas prices by 27 percent.
Average profit margins earned on sales to domestic customers were 3.3 percent over that period - with average gas sale margins at 4.4 percent and electricity sale margins at 2.1 percent, according to the statement.
“We are continuing to look at whether overall levels of profitability in energy retail have exceeded an appropriate benchmark,” the CMA said.
The final conclusions of the probe are not expected until November or December.
Prime Minister David Cameron first ordered a review of competition in the energy retail sector in October 2013.
Public trust in the country’s “big six” providers - EDF, SSE, Centrica, E.ON, RWE npower and Scottish Power, which control around 95 percent of the energy market - had slumped after years of rising energy bills.
Britain’s energy market regulator Ofgem referred the sector to the CMA for investigation last year after concerns that energy bills were rising faster than inflation.
The opposition Labour Party has promised to freeze prices until 2017 if it wins a general election this May.
The investigation also prompted speculation it would result in the breakup of the big six.
“I have always said if there needs to be further action I certainly wouldn’t shrink from seeing an energy company broken up, but you have to do that on real evidence and the CMA will provide that evidence,” UK Energy Secretary Ed Davey told BBC Radio on Wednesday.
The CMA statement is available here: here
Additional reporting by Kylie MacLellan and Sarah Young; Editing by Dale Hudson and Pravin Char