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Energy Suppliers to face price review

The energy regulator OFGEM is to investigate recent price rises as it says they have significantly widened suppliers profit margins.

Ofgem said that the net profit margin of £65 per typical customer in September was now £90, a 38% rise.

The calculations take into account price rises announced by three of the "big six" suppliers in recent weeks.

Energy UK, which represents the major energy suppliers, said it had "nothing to hide" during a review.

Ofgem will review the domestic energy market to see if more action is needed to protect consumers.

A previous investigation of the market in October 2008 found no evidence of anti-competitive behaviour in the sector.

Review

The work will be completed by March 2011, and will study the "effectiveness of the retail market".

The regulator said it was asking if "companies are playing it straight with consumers" after the latest figures showed a 38% rise in profit margins from the typical dual-fuel customer in the last three months.

"The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in," said Ofgem chief executive Alistair Buchanan.