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Energy providers take on Ofgem

The scene is set for a major battle between Ofgem, the energy regulator, and the army of UK energy companies. Ofgem has today accused energy companies across the UK of increasing their profit margins at a time when customers are struggling to make ends meet and indeed wholesale energy prices are falling. The regulator estimates that gross margins are now £170 for each dual fuel customer against an average of just £110 over the last three years.

This is a significant increase in profitability for UK energy companies and Ofgem believes there is substantial scope for reduction in prices in the short to medium term. So what do the energy companies think?

British Gas is the first company to come out in response to the Ofgem statement with a warning to customers that prices are likely to remain relatively high and indeed, in the short to medium term, it is highly likely that prices will rise. It seems as we approach the winter period, UK energy companies are looking to squeeze customers yet again despite promises from UK government and the UK regulator that they would block such moves. For some reason the UK authorities appear to be losing the battle against the UK energy companies and nobody can quite understand why.

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