| |
Share, Like & Tweet!
|
|
|
|
|
< back to news stories
Ofgem Crack Down on Predatory Pricing
13/01/2012
The six energy giants British Gas, EDF, Eon, npower and ScottishPower are being threatened by Ofgem to proceed with a crackdown on illegal “predatory pricing”. The tariffs being offered are examples of big price discounts being offered to new online customers. SSE have admitted that online billing could save them about £10 to £20 per customer, but discounts are being offered in the region of around £300, therefore the larger companies making a loss, otherwise know as "predatory pricing" which is something not sustainable for smaller suppliers such as First Utility.
The Ofgem caution comes at a time when British Gas is considering reducing its prices due to the sharp drop in wholesale gas prices. Potential savings of around ten per cent are being suggested from British Gas therefore potentially starting a price war.
Ofgem are receiving complaints from the smaller energy companies over the big price discounts by their larger competitors and the so called “predatory pricing”. First Utility has around 65,000 customers but state they are not in a position to compete with the larger energy companies with predatory pricing wars. Darren Braham, chief financial director, said “The only way they can make these astonishing offers is by making a loss. This is predatory pricing and we are too small to compete with the larger energy companies. It’s a way of driving us out of business.”
After negotiations with Ofgem last year, British Gas and SSE decided to withdraw their cheap online dual-fuel discount’s used to entice new customers.
Ofgem have stated that as of yet they have not found any violations of strict competition rules, but are deliberating whether the larger energy companies have abided by the strict rules of short term discounts to their online customers.
In the meantime, Ofgem are urging energy companies to put their views across about the so called illegal "predatory pricing" and proposals in order to reform the energy market.
The Right Equity Release offers completely independent advice on equity release plans.
Our specialist adviser will go through a full fact find with you, this is completed on a free no obligation basis. It is important to The Right Equity Release that you are completely happy with your decision and so we encourage you to consult with family members.
To find out the total of equity release you are entitled to please use our Right Equity Release Calculator.
|
| |
|