Ofgem monitors the UK energy markets and by encouraging competition between suppliers they try to ensure that the customers get the best deal. However, energy prices are constantly on the rise and even after conducting an investigation into this, Ofgem were unable to find a solution and predicted that prices may continue to rise in the future.

Energy prices have recently increased due to rising wholesale costs, with a 20% rise in both gas and electricity prices in 2004. This is due to a depletion of UK sources, which then increases the wholesale costs as more imports are needed. Every major gas supplier in the UK increased its prices in 2004 as a result of this pressure from rising wholesale costs.

In the Gas market there are a number of different suppliers and you will find that prices vary greatly between suppliers. Until 1996, all domestic gas users had their gas supplied by British Gas. Since then, competition has been introduced and you can now choose your supplier. Since customers have been able to switch suppliers, competition has become fierce.

Due to this competition, it has become popular to switch suppliers. The current rate of switching is 37% for gas and customers are saving substanstial amounts by doing so.