Hospitality group urges government to investigate soaring energy prices

The group fears that energy suppliers may be quoting far above wholesale retail prices.

UKHospitality is urging the government to investigate the soaring energy prices to allay the fears that energy suppliers are quoting far above the wholesale prices with no transparency as to why, mitigating the support package the government is giving to the hospitality sector.

According to the group, the margin between wholesale and retail energy prices has soared over the last six months, despite the government’s intervention in the market. 

“Typically, the retail price would be slightly above the wholesale price. That is no longer the case with hospitality businesses now reporting a significant difference between the two, with no rational explanation offered to justify the increase,” UKHospitality said.

UKHospitality Chief Executive Kate Nicholls said that the soaring costs are hitting businesses that have not fully recovered from the pandemic, may be carrying substantial debt as a result, and are facing a downturn in consumer spending due to the cost-of-living crisis. 

“There needs to be complete clarity and certainty that energy suppliers are not deliberately profiteering from the current crisis and the size of the Government’s intervention. That is why I’ve urged the Business Secretary to recommend Ofgem and the CMA urgently investigate. I believe it is in the interests of business, the taxpayer and the Government itself to be completely assured that its support package is being delivered in the fair way it intended and not used for commercial gain at a time of national difficulty,” Nicholls said.

Nicholls said that ‘any investigation needs to be rapid, reporting before Christmas,’ to ensure that the energy market is operating competitively and that the government is getting value for the money from its support package.