The retail arm of Shell PLC (LSE:SHEL, NYSE:SHEL) was fined more than £500,000 by Ofgem, the UK’s energy regulator, for charging 11,275 customers more than the price cap.
Shell Energy Retail, which supplies gas, electricity and broadband, was fined the £536,970 after it overcharged prepayment customers due to “operational errors” for periods of time between January 2019 and September 2022.
Shell will repay £106,000 to customers as part of the fine and will also need to pay £30,970 in goodwill payments to affected customers and £400,000 to Ofgem’s consumer redress fund.
The regulator said the fine was determined after it considered “the additional financial hardship that this issue may have placed on prepayment customers, especially when energy prices are at historic high levels”.
While “this issue represents a serious matter,” the watchdog took into account that Shell self-reported the issue and put in place steps to address the failings.
As a result Ofgem said it decided not to take formal enforcement action on this occasion.
Ofgem is due to confirm the new level of the energy price cap this Friday, which analysts forecast could rise to £3,600 per household, a leap of more than £1,600 in a year.
This year Shell posted record quarterly earnings of US$9.1bfn in the first quarter and topped this with US$11.5bn in the second.