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Ofgem figures show energy bills continue to rise rapidly

  • 16 May 2012, 15:18
  • Ros Donald

Ofgem has published  new figures showing that energy bills continue to rise rapidly.

The figures also show that wholesale energy costs continue to make up the biggest chunk of consumer energy bills, expecially in the gas market - in 2012, wholesale gas and electricity costs made up 48 per cent of the average consumer's energy bill. 

Ofgem produces its Supply Market Report every year, examining the "difference between wholesale costs and standard tariff bills". According to Ofgem's estimates, wholesale energy costs on dual fuel use - which accounts for the majority of UK consumers - rose £80, from £555 in 2011 to £635 this year. At the same time, the average customer energy bill rose £140, from £1,170 to £1,310.

The amount consumers pay for gas continued to rise. The average gas bill in 2012 was £780 in May 2012, compared to £665 last year, with the wholesale cost of gas rising from £340 to £400 - despite the fact that companies used strategies to even out wholesale prices such as buying fuels in advance. Wholesale electricity costs are smaller, but also rose from £220 last year to £240.

Ofgem also provides figures for how much other costs including VAT add to fuel bills. On a dual fuel bill, an average consumer paid £475 in 2011, rising to £515 in 2012 or 39 per cent.

Ofgem doesn't break down these costs into the different charges the government levies on consumer fuel bills. But according to material that explains the methodology, "environmental and social supplier obligations" - which include money to encourage renewable technologies, discounts for the fuel poor and money for other green measures - now make up around seven per cent of a typical dual fuel bill, or about £91.

We have previously noted how these costs have been inflated in the press - the new figures show that Ofgem's estimates are still  well short of figures quoted in the Dail Mail which suggesting households are paying up to £200 for green policies.

The report is intended to produce an estimate of the profit energy companies can expect to make from a typical energy customer each year. This year the "net margin" or average profit per customer rose from last year's £10 to £30.

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