Energy companies, a poll showed this week, are now even more detested than the banks. And no wonder. As we reported yesterday, their profits have soared by 50 per cent per household due to falling gas prices, since – on top of all their other sins – they have failed to pass on the benefits to their customers. It’s been calculated that the average annual bill would be lowered by £140 if they reflected all these savings; instead, measly recent cuts have only reduced them by between £9 and £35, depending on the miserliness of the company.
A little over a year ago the Big Six were telling everyone who would listen that “green taxes” were responsible for their high prices. Many, if not this column, swallowed the lie. Their number included the Prime Minister, who reputedly vowed to cut the “green crap”; in practice this meant slashing the only programme that helped poor people reduce their bills.
The energy companies offer fixed price deals. This means that they buy their supplies forward. Meaning that much of what is currently passing through the pipes was bought at the old higher prices.
And recall that Miliboy said that he was going to make them cut their prices? Meaning that they had to buy forward in order to protect against upside risk?