LONDON: British consumers would have saved 1.2 billion pounds ($1.9 billion) a year from 2009 to 2013 with more effective competition in the energy industry, according to the U.K.’s antitrust authority.
Households could have saved as much as 160 pounds a year on gas and electricity by switching suppliers, the Competition and Markets Authority said in a report Tuesday. Bills need to be easier to understand and switching must be encouraged, it said.
“The majority of us are still on more expensive default tariffs,” Roger Witcomb, chairman of the CMA investigation, said in a statement. “Many customers do not shop around to see if there’s a better deal out there –- let alone switch.”
Energy regulator Ofgem requested the review after electricity rates more than doubled in 10 years, raising concern that utilities used their market power to increase prices. While the probe found the industry’s structure didn’t hurt competition or lead to excessive profits, it showed average prices for households were about 5 percent above the “competitive benchmark level.”
As many as 56 percent of people surveyed had never changed suppliers, were unaware it was possible or didn’t know if they had done so, according to the CMA. Just over a third said they had never considered switching. The number of consumer complaints surged fivefold from 2008 to 2013.
