Energy Sector Prepares For Further Disruption As ‘The Big Six’ Enter Tariffs Row | Get Financial Freedom Tips | Transform Your Financial Future


Monday, February 27, 2012

Energy Sector Prepares For Further Disruption As ‘The Big Six’ Enter Tariffs Row

Whilst the start of the year may have looked promising for energy providers, who warmed the hearts of Brits by lowering their gas prices in January, it seems that this affection was exceptionally short-lived. Whilst the reductions which averaged at 5% were welcomed by many they did little to ease the financial suffering of those crippled by household bills.

Prices cause lack of enthusiasm

Energy Sector
Perhaps the celebration was so short in duration because the 5% reduction amounted to very little after ‘The Big Six’ raised the prices of their services by drastic amounts. In 2011, gas increased by an average of 28% whilst electricity costs rose by an average of 14%.

Recent decreases saw gas reduced by 5% whilst electricity prices suffered no change, making cheap electricity hard to come by. Despite the change, most households remained ambivalent towards the situation – resenting ‘The Big Six’ for what they saw as extortionate prices and unfair increases.

Tariffs row

As if the previous changes to prices hadn't been enough to deter customers from using these main suppliers, a recent announcement by Which? has seen energy companies face further backlash for their prices. According to the announcement, sales representatives used “dubious tactics” to obtain sales, promising customers large amounts of savings if they used high-rate tariffs.

Consumers were led to believe these costly tariffs would save them between £20 and £142 but the tariff would have actually left them worse off – by as much as £311 in some cases. ‘The Big Six’ had already been pressured into providing ‘fairer’ rates to struggling customers – something which has been called into question following this report.

Price campaigns

The pressure imposed on these major suppliers was generated through numerous campaigns led by leading newspapers and consumer bodies. The Independent launched their “End The Big Six Energy Fix” battle just last week and have already achieved an impressive 7,000 supporters.

The “Big Switch” price campaign led by Which? also attracted thousands of followers as public opinion turned against major energy suppliers once again. With negative reports continuing to circulate about these firms it is no wonder that public confidence in this sector is currently at an all time low.

What will ‘The Big Six’ do next?

Considering the recent report, many are wondering how ‘The Big Six’ plan to react. Regardless of their decision, damage limitation is likely to be their main aim – but can they really overcome this additional blow to their reputation?

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