The UK Chancellor, Alistair Darling, has requested a meeting with Ofgem as consumers face increased energy bills.

Alistair Darling, the UK Chancellor, has written a letter to request a meeting with Ofgem, the energy regulator, in order to discuss the dramatic rise in energy costs faced by consumers.

This follows the news that npower, a leading energy provider, has in the past week [on Friday 4 January] increased its domestic electricity and gas bills by double figures, and the industry expects all UK energy companies to follow suit.

Energyhelpline.com, an independent energy price comparison service for consumers, has commented on the move by the Chancellor to meet with Ofgem, and has stated that “such a move could embarrass the energy companies into lowering the price voluntarily.”

The company has estimated that the average household energy bill will be over £1,000 a year and has criticised energy suppliers for not absorbing some of the associated costs themselves. Paul Green, CEO of Energyhelpline.com, commented: “Energy companies do have the capacity to buy reserves in advance and there is no need for the price rises in raw materials to be fed through to consumers in full. Companies should put in place more robust hedging strategies to protect consumers from steep price rises.

“…Given that wholesale prices are still 20% lower than they were after the last spate of price hikes in 2006, companies have failed to pass on the falls to consumers. To make matters worse, there are signs that companies are abusing the volatility in the commodity markets to introduce excessive price rises.”

This view is echoed by price comparison site uSwitch.com, which stated that the price cuts introduced by energy suppliers in 2007 only reduced consumer bills by £1.7 billion, whereas the price increases from the previous year added £4.8bn.

Head of Home Services at uSwitch.com, Tim Wolfenden, said: “The prospect of being able to raise prices has had suppliers champing at the bit, so it was always just a matter of time before one of them made the move. By announcing price increases, npower has given the other suppliers the green flag that they’ve been waiting for.”

To read ICM’s news article detailing npower’s announcement on Friday 4 January, click here.