City watchdog to investigate gas price claims
Households across the region struggling to pay rising gas bills might be paying over the odds because energy giants are allegedly rigging prices.
The City watchdog last night said it was investigating claims from a whistleblower that the wholesale gas market has been manipulated by some energy firms.
The Financial Services Authority (FSA) said: “We can confirm that we have received information in relation to the physical gas market and will be analysing that material.”
Ofgem, the energy regulator, said it had also received information relating to trading in the gas market.
Energy Secretary Ed Davey said: “I am extremely concerned about these allegations and will be keeping in close touch with regulators while they get to the bottom of this.”
Rising energy bills are one of the biggest sources of household budgetary pressure and is part of the reason the Western Daily Press supports the Surviving Winter appeal, the campaign that appeals for relatively well-off pensioners to pool their Winter Fuel Payment for those most in need.
It is understood the Treasury and the Department for Environment were alerted to the allegations by Ofgem and the FSA yesterday. Mr Davey is expected to make a Commons statement today.
The whistleblower, named as Seth Freedman, claimed the gas market has been ‘‘regularly‘’ manipulated by some of the big power companies.
Mr Freedman, who works as a price reporter for ICIS Heren, a company responsible for setting so-called benchmark prices, raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company.
It was also reported that Ofgem has been warned by ICIS Heren that it has seen evidence of suspect trading on September 28, the date that marks the end of the gas financial year. A Department of Energy and Climate Change spokesman said the Government takes alleged abuse in markets “very seriously”.
ICIS said in a statement that it has "detected some unusual trading activity on the British wholesale gas market on September 28 2012”.
“The cause of the trading pattern, which involved a series of deals done below the prevailing market trend, has not yet been established,” an ICIS spokesman said.
The UK’s energy companies spoke out last night.
EDF Energy said: “EDF Energy does not participate in loss-leading trading activity and considers it to be against existing market regulation.”
Meanwhile, families across the West countryside will be further hammered if the Government forces through a New Year fuel rise, MPs were warned last night. The Countryside Alliance spoke out as the Commons prepared to vote on a bid to delay the planned 3p a litre increase in fuel duty from January until at least next April.
New research published by the Alliance found people living in rural South West council areas have to shell out more to drive to work. Last month they paid on average £15.17 more on fuel for their commute than those living in urban areas.