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Big Six energy firms 'making six times more profit'

Energy firms have been accused of making "six times" the profit they admit to publicly , following an investigation into their finances.

The claims are based on a report for Energy UK, which represents power firms, by respected accountancy firm PWC, according to the Sun newspaper.

The paper said it obtained an original copy of the report which is said to show that the cost of supplying a home with gas and electricity "falls well below" what families pay with the Big Six energy firms.

It reportedly shows costs to suppliers - such as buying gas, running call centres and power lines- amount to £844 per year to provide fuel to one household in 2016.

But the majority of families with the Big Six are on so-called standard variable tariffs and are paying as much as £1,172 with some suppliers, the Sun said.

This leaves a profit of £272 - a margin of 24% if VAT is removed, the newspaper added.

Energy UK cites on its website calculations by industry regulator Ofgem that operating margins in 2015 were equal to around 4% of a bill.

But the paper accused Energy UK of cherry-picking parts of the report to put on their website which failed to include details of the profits.

Energy UK said it "rejects completely any implication that the report was changed to alter the perception of supplier profit".

A spokesman added: "The purpose of the report is simply to help understand how the different pressures on an average bill have changed over recent years. It was not intended to present, or to hide, how much profit different firms make across their various tariffs."

Energy Secretary Greg Clark said he would summon Energy UK for a meeting "to discuss the report's findings".

"This report appears to confirm my concern that the big energy firms are punishing their customers' loyalty rather than respecting it," he said.

"Customers who are loyal to their energy supplier should be treated well not taken for a ride and its high time the big companies recognised this.

"I have made clear to the big firms that this can't go on and they must treat customers properly or be made to do so."