Firms are pulling a fast one and they know it
Published 26/01/2016 | 02:30
It is the great energy shakedown.
Companies are getting away with a hoist on the budgets of families by failing to cut their prices.
Costs for energy firms are falling like a stone, yet their resistance to chipping a bit off the bills of householders is rock solid.
We consumers are falling victims to this, with those in a position to protect consumers deafening us with their silence.
There are eight energy suppliers, but none are regulated on the price they charge consumers.
This does not mean that the energy regulator, the Commission for Energy Regulation, could not apply pressure on suppliers to be fairer to consumers.
After all, some aspects of the energy market are regulated, such as network charges and the cost of producing power from renewable energy.
But we have not heard a peep out of the regulator on this lately.
Minister for Energy Alex White has also been keeping his head down, despite wholesale energy costs being at a six-year low.
The average wholesale price for January was now 40pc lower than the average monthly price for the same month over the previous three years.
Compare this plummeting fall in wholesale gas prices with the measly 2pc to 2.5pc reductions in household bills recently.
This is a clear case of profiteering.
Energy companies deny this, arguing that it takes time for changes in wholesale prices to feed through fully to customers, because they typically buy in advance so that they can offer customers stable prices for a period of time.
Energy firms are playing a deeply cynical game. Even though there are eight of them, they know that the vast majority of people will just keep paying without complaining, even though prices are far higher than they should be.
Instead, the firms are concentrating their efforts on building market share by competing hard for switchers with price discounts, cash-back offers and special offers like free boiler services.
For those who switch, big savings can be made.
Opting to get your electricity from Energia will mean annual savings of €214. Dual-fuel customers can save €360 by opting for Energia for electricity and Flogas for gas.
But if you are among the 85pc of households that fail to switch, don't expect grasping energy firms to pass on the benefits of lower wholesale gas and oil prices to you.