Response on wholesale energy costs
Press release
- Publication date
- Industry sector
- Supply and Retail Market
A spokesperson for Ofgem said:
“Ofgem has been at the forefront of making the energy market more transparent for consumers over the past few years. One of the ways we do this is by publishing weekly updates on our website which estimate the costs and margins for supplying a typical customer of a large energy company. Obviously the costs of an individual supplier will vary and it is up to them to explain their own costs, margins and pricing decisions to their customers. In particular companies will buy their power and gas at different times and different prices on the wholesale market. In publishing these figures Ofgem is giving consumers greater understanding of the relationship between energy bills, wholesale energy prices and the other costs that make up energy bills.
“Our own weekly monitoring published on our website estimates that, over the last year, the cost of wholesale gas and electricity to serve a typical dual fuel customer would have risen by around £10 to £610. However, this figure could be higher depending on the hedging strategy of an individual company for buying gas and power in forward markets. We have also published actual market data which shows that the wholesale price of gas for use this winter is 8 per cent higher than the price of gas for use last winter. The wholesale price of electricity for use this winter is also 13 per cent higher than the price of electricity for use last winter. The actual increase in prices for an individual company will depend on their particular circumstances.”
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Notes to editors
1. The weekly updates we publish on suppliers’ costs and margins is available on our Supply Markets Indicators webpage.
2. Our analysis on understanding energy prices including a breakdown of a dual fuel bill is available on our understanding energy prices webpage
3. Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.
For further press information contact:
Chris Lock: 020 7901 7225
Howard Rhoades: 020 3263 9629
Out of hours: 07766 511470