This page is also available in Welsh.
Ofgem does not set energy prices. Ofgem’s role is to protect the interests of existing and future energy consumers. Energy prices are determined by the suppliers themselves based on their assessment of the wholesale and retail markets. It is up to energy companies themselves to explain their prices changes and profits to their customers and investors.
The relationship between wholesale and retail energy prices is complex. Suppliers buy gas and electricity in advance of when it is delivered to customers. They may not always pass on wholesale cost increases immediately and falling wholesale prices may not immediately result in bill reductions.
The price you pay for your energy will result from the agreed contract you have with your energy supplier. If you think the price you are paying is too high you should check your contract and consider switching supplier.
The Retail Market Review (RMR)
Our current Retail Market Review identified several areas of concern that suggested the market was not working as it should. To address this we have proposed (among other things):
- widening the definition of businesses covered by requirements on suppliers to give notice and information on contracts
- putting in place new rules to protects business customers from misselling.