Energy firms 'are failing to pass on price cuts'.

Summary: Energy firms are overcharging consumers by almost Au100 a year, new research suggests.

Energy firms are overcharging consumers by almost Au100 a year, new research suggests.

World oil prices have fallen but Britons are still paying more to heat and light their homes than last summer, with household electricity and gas bills averaging more than Au1,200 a year, according to a study by the Consumer Focus watchdog.

Industry regulator Ofgem has given suppliers until next week to explain why they have not passed on lower wholesale electricity and gas prices to households.

The reduction in wholesale prices means companies could slash gas bills by up to 10 per cent and electricity by 3.5 per cent, leading to annual savings of Au96.40, the research shows.

Power companies are estimated to be making an extra Au2.2 billion by failing to pass on the full discounts to every household

Robert Hammond, energy expert for Consumer Focus, said: "The fact that wholesale prices are at a three-year low adds further to the already heavy weight of evidence that greater energy price cuts are needed.

"It is only right that these price cuts are passed on to consumers, many of whom are struggling to afford high energy bills."

Garry Felgate, chief executive of the Energy Retail Association, which represents suppliers, said power companies buy much of their energy in advance and the current price on wholesale markets does not reflect what they paid for their supplies.

Independent Television News Limited 2009. All rights reserved.

Independent Television News Limited 2009. All rights reserved.

Provided by Syndigate.info an Albawaba.com company