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Competition watchdog calls for more energy tariffs

The Competition and Markets Authority (CMA) is expected to propose easing restrictions on the number of tariffs energy suppliers can offer to customers.

Many may see this move as a snub to industry regulator Ofgem, which imposed the limits last year. Ofgem’s flagship reform which limits energy suppliers to just four tariffs was designed to address customer confusion, but has since been blamed for reducing choice for consumers.

The easing of the restriction, contained in a report to be published by the CMA later this month, will be seen as one way of using innovative ways to encourage households to change supplier.

The CMA’s interim study in February of this year said the average dual fuel customer could save between £158 to £234 a year by switching to a different energy provider. However, it was also found that millions of UK households have either switched supplier, or rarely do so.

Stephen Fitzpatrick, Chief Executive of small supplier Ovo, said: “Millions of people, many of them vulnerable, are being punished for their loyalty, paying hundreds of pounds more for their energy than they should be.

“That money is being used by the Big Six suppliers to hook in new customers with loss-leading tariffs. It’s a terrible way to treat them, destroying competition at their expense.”

Energy suppliers have also been slammed for passing on woeful price cuts to their customers – as little as 1.3% this year – despite a fall in wholesale costs.

Source: The Mirror