Energy industry regulator Ofgem has told energy firms to simplify their prices to avoid confusing their customers.

The Office of Gas and Electricity Markets (Ofgem), the regulator for the energy industry, has told suppliers that their tariff structures are unnecessarily complex, which leave their customers “bamboozled”.

The investigation came after suspicions that the big six UK energy suppliers (British Gas, Npower, EDF Energy, ScottishPower, Scottish & Southern Energy and E.ON Energy) were making too much profit.

There are now over 300 tariffs, a number that has increased from 180 in 2008. Ofgem says that this trend is serving only to confuse consumers.

Ofgem also say that the energy suppliers’ gas and electricity price rises come swiftly after hikes in wholesale prices, but take much longer to be decreased when wholesale prices fall.

They have also said that competition needs to increase in the market, claiming that the complex tariff structures and a lack of transparency are to blame, along with poor customer service.

Ofgem have said suppliers could be referred to the competition commission if they fail to comply with the new system.

The regulator also says it wants to put a stop to rolling contracts, contracts that will automatically renew if customers fail to terminate their current deal.

Ofgem say that customers should instead be put onto a default rate, instead of locked into a new long term deal should they fail to terminate.