The energy regulator Ofgem has ruled that fuel companies that offer customers different tarfiffs depending on whether they pay by direct debit or pre-payment meter are acting unfairly.

It also said that dual fuel tariffs meant that 4.3 million customers with no gas supply could not get the best deals on electricity.

At the end of an investigation into the energy market that began last February, the fuel regulator said that the energy market worked well for most customers, but that the energy suppliers needed to deliver the benefits of competition to all.

It said energy firms could do more to make sure that all customers were able to access the best tariffs.

Chief executive Alistair Buchanan said: "Initial findings from our energy market probe give us grounds to demand that companies end practices that hinder customers, especially the vulnerable, from getting the best deal.

"If they fail to satisfy our requirements voluntarily, then we can move to a Competition Commission reference."

The Ofgem investigation, however, found no evidence that firms had been operating a cartel and colluding to fix prices.

An industry consultation on the report will now take place, ending on 1 December.

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