Why is Ofgem raising the energy price cap when energy companies are making huge profits.

Question

I received an email from my energy supplier this morning telling me that as ofgem have raised the price cap they are putting my prices up. According to the wiki page “Its primary duty is to protect the interests of consumers, where possible by promoting competition.” Yet the increase seem counter intuitive to this.

In: Economics

Answer 1

The energy conpanies making record profits weren’t the same ones that supplied energy to consumers. Indeed many suppliers went bust in the last few years due to the price cap. Meanwhile the producers that they had to buy from at market rates made record profits.