I understand the original point of the energy price cap when it was introduced by the last Conservative government was to prevent British Gas and the other big suppliers from overcharging vulnerable customers on their rip off standard variable tariffs.
Now though the wholesale costs have gone way above the price cap so it’s now being used by Ofgem to force suppliers to sell energy at a loss through the entire winter. This is surely not what the policy was envisioned to do and it will lead to many suppliers being completely unable to survive. Thirteen have gone under this year alone! I can only see this leading to a more expensive and less competitive market in the future which is dominated by a few heavily-indebted large suppliers. Not good for consumers, not good for the energy market.
I’d like to hear from people who think it’s a good idea though because presumably the government has its reasons to keep the price cap. Energy poverty is bad and getting worse, energy companies have the balance sheets to support the market through the spikes maybe? I’m not convinced but what do you guys think of the continuation of the price cap?