The energy regulator has admitted the market is not working and he can only work within a tight framework to bring reforms amid "deep distrust" over rising bills.
Ofgem's chief executive Andrew Wright told the Energy and Climate Change Committee of MPs he "completely understands" frustration and anger about increases to household bills of up to 11% ahead of the coming winter.
He also warned that Labour's proposed energy price freeze "puts at risk the proper functioning of the industry" but admitted consumers were not convinced that price rises were either fair or justified.
The watchdog has released figures which reveal that the average profit for the big six suppliers from each dual fuel customer was at £105 currently - almost double the figure for 2012.
Mr Wright said: "I completely understand why people feel frustrated and angry about rising energy bills.
"Prices have more than doubled over the last 10 years at a time when incomes have been squeezed, and consumers are not convinced that price increases they see are either fair or justified.
"There is a deep distrust of anything the energy companies do or say. Partly that reflects the history - in that respect to some extent that's their own fault.
"There's a legacy of years of aggressive doorstep selling for example, we see poor customer service, confusing tariffs, all of these things have compounded that mistrust of energy suppliers and when anyone tries to take action by changing supplier then they experience a market that is both confusing and difficult to navigate.
"Consumers have a perception that the market isn't working well and that is something that we agree with. We think that the retail market is not working as well as it should and that's why we've put in place the retail market reforms to try to make the market simpler, clearer and fairer."
Those included limiting firms to just four tariffs.
Mr Wright continued: "It's not surprising that consumers jump to conclusions that price rises are being driven by profiteering, and that is the basic problem that we have and the question is what do we do about it."
He told the committee that Ofgem could only work within its tight remit to help boost competition in the sector amid wider political debate about whether it was fit for purpose.
Labour, which has pledged to introduce a regulator with greater teeth, came under fire from Mr Wright over its plan for a 20-month freeze to bills if it wins the 2015 general election.
Energy companies had previously warned such an intervention risked crucial investment in the country's energy infrastructure.
Following Ofgem's report on Monday analysing 2012 energy firm profits, industry body Energy UK argued the figures did not take into account the provision for securing energy supplies for the future.
Npower owner RWE confirmed on Tuesday that significant cost pressures had forced it to pull out of the massive £4bn Atlantic Array windfarm project.
British Gas, E.ON, EDF, npower, ScottishPower and SSE together recorded underlying earnings - before interest payments and tax - of £1.19bn during the calendar year, up from £221m in 2009.
Suppliers have blamed rising wholesale energy prices, higher distribution costs and Government green levies for the increases though the levies may be taken off bills by the chancellor George Osborne next week.
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