Britain’s energy suppliers are set to rake in a massive £1.74bn in profits from hard-pressed customers’ bills over the next 12 months, according to a shock new report.
It comes as a separate study found that regulator Ofgem’s energy price cap is preventing customers from accessing lower tariffs, harming competition and boosting inflation.
Rishi Sunak’s government has indicated it is unlikely to step in again to protect Britons still struggling with their energy bills – dismissing the idea of another subsidised price guarantee.
Despite the continued cost of living problem, UK energy providers will be allowed to increase the amount they charge variable-rate tariff customers.
According to Warm This Winter, a coalition of anti-poverty and environmental organisations, suppliers’ annual profit from the average customer on a variable tariff has risen from £27 in 2017 to £130 in early 2023.
According to the analysis, prepared in collaboration with Future Energy Associates (FEA) analysts, the gas and electricity majors will benefit £1.74 billion from variable customers alone in the coming year.
End Fuel Poverty campaign organiser Simon Francis said the research “sheds light on the murky depths of Britain’s broken energy system.”
Mr Francis also urged the Sunak government to implement a “social tariff” to ensure affordable rates for low-income families, saying, “Without a fundamental overhaul of the energy grid and energy tariffs, households will continue to lose out while suppliers profit.”
The amount excludes fixed-rate tariffs and profits gained through allowances for Covid debt and Russia’s invasion of Ukraine, all of which contributed to the massive profits revealed by British Gas and Scottish Power last month.