Energy prices for more than 4 million British households have been capped by Ofgem, the regulator, in a move it claims will bring down bills for customers with pre-pay meters.
The cap was one of the recommended measures by the Competition and Markets Authority last year following a two-year investigate into the retail market.
But Bill Bullen, Utilita CEO, has warned the new price cap will squeeze profit margins in that part of the market to such an extent that suppliers will raise other tariffs.
“We believe this is a political decision, not an economic one,” he said.
“We have also always maintained a mistake of this magnitude will have a detrimental effect on other tariffs, as we have just seen with npower’s huge price rise this week.
“This price cap will have unintended consequences as it is clear the CMA has simply got the level and coverage of the price cap wrong."
Bill this week spoke to the Financial Times about the impact of the cap, read more here (paywall).
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