MILLIONS of consumers are being overcharged for their energy, according to a leading think tank.
The Institute for Public Policy Research (IPPR) says the practice by some energy companies of offering discounted tariffs that do not reflect cost means some customers are paying hundreds of pounds more than their neighbours even though they use the same amount of gas or electricity.
The IPPR claims the practice means smaller customers are unable to establish a position in the market and has called on energy regulator Ofgem to ensure suppliers only offer tariffs that are cost-reflective.
The IPPR report tested tariffs in a range of UK cities offered by the country’s leading utility firms, including British Gas, EDF, Scottish Power and Scottish and Southern Energy. ScottishPower offered the greatest differential between its standard and cheapest tariff – up to £339.