Mid-tier supplier Bulb has accused the big six of “squeezing every last penny” from customers after the introduction of the energy price cap.
Research from the company suggests the biggest energy suppliers have grouped their tariffs at roughly the same price with only a £2 difference between the cheapest and most expensive big six standard variable tariffs.
Bulb said the average tariff is £4 cheaper than the price cap, which Ofgem set at £1,137 before it came into force on 1 January.
The company claims the “big six appear to have taken the price cap as a target rather than a limit” and said consumers have “little chance to save” if they choose to stay with the big six.
Using figures for each of the big six from Uswitch in January 2019, Bulb said SSE, Scottish Power, Npower and Eon all charge £1,133 for a home on an average gas and electricity tariff.
Meanwhile British Gas charges £1.131 and EDF £1,132, according to Bulb.
The supplier, which was recently named as the UK’s fastest-growing private company now has more than 870,000 customers.
It increased its prices in November for the third time in 2018, blaming rising wholesale costs.
Additional analysis by Bulb about tariff prices found that the practice of “tease and squeeze” pricing has “dramatically reduced” since the introduction of the price cap. It attributes this to the larger suppliers increasing the prices of their cheapest tariffs.
The research indicates that the difference between the average cheapest and the most expensive big six tariff is now £33, down from £150 in June 2017.
Hayden Wood, co-founder and chief executive of Bulb, said: “The price cap, which Bulb supports, was meant to be a maximum and not a target. It’s disappointing to see larger suppliers setting their standard tariffs as close to the cap as possible – squeezing every last penny they can out of families.
“While it’s good that the practice of ‘tease and squeeze’ seems to be ending, this is only happening because the big six have increased the prices of their cheapest tariffs.
“Fortunately, it’s still possible to make big savings by switching supplier. We’d like to see as many people as possible making the switch. Bulb is the main alternative to the big six and our prices are £120 below the price cap.”
Lawrence Slade, Energy UK’s chief executive said: “We have previously warned of the unintended consequences of price caps including the risk of that prices can often converge around the level set.
“The price cap presents a significant challenge for many suppliers in the retail market in what is evidently a difficult climate with a number of providers exiting the market in recent months.
“Suppliers are already facing steeply rising costs the vast majority of which are out of their direct control, including wholesale costs which have increased by well in excess of 30 per cent in the last year. As Ofgem have indicated, if costs continue to rise then the cap will have to increase to reflect this in future.
“So we must continue to encourage more customers to engage and benefit from the large savings that can be made by switching which exceed those delivered by the cap – and from fixed price deals which can protect against potential future rises.”
An Ofgem spokesperson added: “The price cap protects consumers on default deals from being overcharged for having gas and electricity supplied to their home and ensures they always pay a fair price.
“We have designed the price cap so that suppliers are still able to offer tariffs priced below the level of the cap.
“Consumers on default deals who want to save even more money can shop around, including by asking their supplier if they are on the cheapest tariff and by using price comparison sites, to make savings on their energy bills.”