Ofgem tells suppliers to explain their bills

The energy regulator Ofgem has demanded that suppliers explain how they calculate bills amid allegations that customers have been overcharged following price rises.

Ofgem has received complaints that when a bill covers a period in which prices increase, suppliers have incorrectly calculated the number of units consumed at the higher rate.

In particular, there have been allegations that when customers provide a meter reading that shows they have used more units than was estimated in their bill, all the additional units have been charged at the higher rate.

The regulator has written to gas and electricity suppliers asking them to explain how they calculate bills after a price hike. Ofgem said: "We want to be confident that customers are being billed properly where there has been a price rise."

The move came on the day the UK's largest supplier, British Gas, put up average gas and electricity prices by 18 per cent and 16 per cent, respectively. Four of the other big six suppliers have also raised prices.