Commenting on ScottishPower’s price rise of 7 per cent for gas and electricity, Trisha McAuley, Deputy Director at Consumer Focus Scotland said:
‘The volley of price hikes all coming in during the winter period will fuel consumer concerns about the energy market. Every time this happens it makes it difficult for people in Scotland to believe that price rises are driven by real supply and demand issues. It feels as if companies raise prices in a pack because they see safety in numbers.
‘This does not mean that wholesale price pressures are not real, that companies don’t need to make a profit or that companies should not act to minimise the impact of a price rise on their reputation. But there is so much at stake in the energy market at the moment. The fundamental issue on consumer trust is whether or not price rises are justified. No-one welcomes a price rise. But when half the market raises prices in just four days, consumers will question whether this is in response to volatile commodity costs or simply pack behaviour.’
Consumer Focus Scotland believes people need to see significant steps being taken by the Government and Regulator to help them to mitigate rising energy costs.
- From next year an average of £4 billion will be taken from consumer bills in the form of carbon taxes. Using a proportion of that revenue to fund a much more ambitious energy efficiency programme could start to tackle fuel poverty and provide a jump start to our energy efficiency industry. See the Energy Bill Revolution for more details.
- Consumers do not know whether they can believe the relationship between energy prices, company profits and the wholesale price of energy. Greater transparency is vital to know whether there is scope for companies to avoid these sorts of price rises.
- Despite recent action from Ofgem and suppliers, the industry still makes it too difficult for consumers to take the simple actions that could save them money. The market must become less complex and less confusing otherwise consumers will not have the confidence to take action.