THE ENERGY regulator’s plans to review the price cap on fuel four times a year will make consumers worse off, experts have warned.
Martin Lewis, the money-saving expert, said Ofgem’s plans “sell consumers down the river”, while others warned it will mean customers experience energy price rises more quickly.
The regulator issued a consultation this morning on the plans which would see the price cap reviewed quarterly to reflect the unstable energy market prices. Currently the cap is reviewed twice a year.
It comes as the cost of living is expected to rise further, prompting calls by Labour for a windfall tax on oil and gas companies. The SNP has also called for such a tax.
The price cap – which is the maximum price per unit that suppliers can charge customers – is updated twice a year in April and October.
Last month, average annual energy bills rose by around £700 (54 per cent) and is forecast to go up another 32% in October when the cap is revised again.
Mr Lewis was so enraged by the plans he swore at staff during a briefing on the consutation this morning, after which he issued an apology.
He wrote: “I lost it when getting a briefing about today’s proposals, where it feels like at every turn, in these desperate times where lives are at risk, it has ignored all asks for consumers and instead kowtowed to the industry (I hope history proves me wrong).”
He said he feared “dire consequences for consumers”, arguing that “we must do more to make things better than them”.
Alistair Carmichael, Liberal Democrat MP for Orkney and Shetland, accused Ofggem of being too concerned about the big energy firms rather than consumers who are paying soaring bills.
He said: “Ofgem has to remember that it is supposed to put customers first, not the major energy suppliers, many of whom have posted sky-high profits in recent months while the rest of the country is facing sky-high prices.
“You get the sense that they spend a little too much time worrying about how those at the top of the industry feel rather than everyday families.”
Mr Carmichael added: “When someone as practical and serious as Martin Lewis is at the end of his tether with Ofgem you know that something has gone badly wrong.
“If he is right that Ofgem is actually trying to reduce competition on price in order to protect the big energy companies then it is a completely backwards way to approach energy supply, particularly when it is families and small businesses who are currently taking the biggest hit.
“There has to be more that the regulator can do to help struggling people, rather than simply acting as a protector of the status quo for suppliers.”
Ofgem chief executive Jonathan Brearley said the plans were intended to help consumers.
He explained: “The proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers.
“It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers.”
Since last year more than 30 energy firms in the UK have gone bust, having been unable to pass on the exorbitant cost of wholesale gas to consumers due to the price cap, with some calling for it to be scrapped altogether.
However the UK Government insisted it would remain in place, and suggested in last week’s Queen’s Speech that it could be extended beyond 2023 when it is currently due to expire.