The maximum amount landlords or “resellers” are permitted to charge for gas or electricity is the amount they have paid for it, plus VAT at the appropriate rate; this is termed the Maximum Resale Price or MRP. Any standing charges can be recovered by the Landlord by dividing it on a pro-rata basis according to usage between all the tenants.
Download the Guidance for Resellers factsheet - PDF, 345Kb - link opens in a new browser window, which sets out the rules for MRP.
Although this factsheet is intended for landlords, it is equally of use to tenants. You will note from the guidance that MRP provisions do not apply to gas or electricity resold for use in commercial premises. In these circumstances, it is likely that the cost of energy use is set as a bilateral agreement between the landlord and tenant. The issue therefore becomes a contractual matter between the contracting parties.
Where a consumer establishes a breach of contractual obligations, or questions the validity of the terms and conditions of a contract, he/she is advised to seek independent legal advice.
Maximum Resale Price Provisions: A decision document [PDF]
Maximum Resale Price Provisions: Ofgem’s final proposals [PDF]
Maximum Resale Price Provisions: Ofgem’s initial proposal [PDF]