Independent UK: Calls for inquiry into alleged 'profiteering' of energy giants

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Calls for inquiry into alleged 'profiteering' of energy giants

By Martin Hickman, Consumer Affairs Correspondent
Thursday, 21 February 2008


British Gas, the country's biggest energy supplier, is expected to announce a 500 per cent rise in profits today, fuelling outrage among consumer groups which claim the public is being ripped off by the industry.

Centrica, the parent company of British Gas, will tell the Stock Exchange that the BG retail arm, which receives up to five times as many complaints as its rivals, made almost £600m profit in 2007.

Most of the money was made between January and March, when the wholesale price of gas plunged as a result of unusually mild weather and a new gas pipeline from Norway.

During those three months, BG's bosses kept prices high, earning what one analyst has described as "absolutely extraordinary" profits.

Yesterday, there were fresh calls for an official inquiry into whether the "Big Six" energy companies have been profiteering and plunging low earners into choosing whether they eat or heat their homes.

"It's quite sickening when companies make these huge profits while, at the same time, we are expecting 25,000 excess winter deaths as a result of people not being able to keep warm," said Lesley Davies, the chairman of the National Right to Fuel Campaign. "The Government must do more for these consumers.

"They prattle on about the winter fuel payments for pensioners but there are just as many single-parent families and others who cannot get the payment." ......(more)

The complete piece is at: http://www.independent.co.uk/news/uk/home-news/calls-for-inquiry-into-alleged-profiteering-of-energy-giants-784918.html

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1. Power to the people: watchdog bows to pressure for energy inquiry

Victory for consumers as regulator launches inquiry into gas and electricity suppliers
By Martin Hickman, Consumer Affairs Correspondent
Friday, 22 February 2008
http://www.independent.co.uk/news/uk/home-news/power-to-the-people-watchdog-bows-to-pressure-for-energy-inquiry-785585.html
The UK's energy companies could be fined billions of pounds after a wide-ranging inquiry was launched yesterday into claims that consumers are being ripped off.

Armed with sweeping powers under the Enterprise Act, investigators acting for the regulator Ofgem will have the right to raid offices and seize documents.

They will be looking for evidence that the inflation-busting price rises announced this year have been co-ordinated or that smaller rivals are being thwarted from competing by hidden transactions. Ofgem announced the inquiry after British Gas revealed a 500 per cent rise in profits to £571m, four weeks after increasing its prices.

The company and four others – EDF, E.On, nPower and ScottishPower – say that they have been forced to raise bills by about 15 per cent because of soaring wholesale prices affected by the booming oil price. But consumer groups complain the rises have been suspiciously similar and warn that low-income customers are being forced into having to choose between eating and heating. If any of the players in the £24bn-a-year industry is found guilty of colluding to fix prices or engaging in other forms of anti-competitive behaviour, Ofgem can impose a fine equal to 10 per cent of worldwide turnover.

[fed-up]

2. murdering thieves-"quite sickening...huge profits...we are expecting 25,000 excess winter deaths..."