‘Energy companies must be responsive to public need', says Reading East MP

20 October 2008

Rob Wilson has today said that energy companies (and other companies) must be responsive to the public need in a time of recession.

Companies that increased their prices, such as oil and energy companies, must not fail to cut charges as commodity prices tumble. The Reading East MP is adamant that the country’s big energy companies should pass on any price reductions quickly to consumers.

The price of crude oil has nearly halved since July and is starting to result in cheaper petrol at garage forecourts. However a failure by energy companies to pass on the drop in wholesale gas prices is predicted to net the firms a £5.5billion windfall.

The UK’s 'big six' power suppliers have been arguing for years that consumers have to pay more for gas and electricity as tariffs are tied to oil prices, and increase bills according to the price of oil. However, now that the price of oil has fallen sharply, they should ensure reductions are passed on to consumers.

“We are heading into winter with over 5 million British households living in fuel poverty, with a good number in my constituency,” Rob remarked, “with the massive drop in world oil prices, the energy companies must start cutting people’s energy bills before winter or we’ll be heading for record numbers of people in difficulty.” 

The Reading East MP has demanded that the Government intervenes if the energy companies fail to take action. 

“I’m concerned that the energy companies might wait until after winter to cut their prices, netting them a massive windfall at the expense of the British public. They must not be seen to be profiteering from the rise in gas bills as I'm not sure the country would be very forgiving towards them.” 

Rob is also worried that the Government’s big insulation scheme, heralded as a solution to the high gas prices, may actually be exacerbating matters by adding to the energy companies’ reluctance to cut energy prices. 

The Association of Electricity Producers said in September that customers would end up paying at least some of the cost of Brown’s big scheme and that when costs were imposed on an industry, the bill ‘always ends up with the customer’. 

“In effect,” Rob remarked, “Gordon Brown’s ‘solution’ to the problem in September may now be actually making matters worse by discouraging energy firms from passing on the fall in oil prices.”