Aug 05

MP wants regulator to look at Wholesale Gas Market

A Top MP has suggested that the Competition authorities should look at the wholesale gas market when looking at competition in the UK’s energy sector.

Tim Yeo, who is chairman of parliament’s energy select committee, contacted the Competition and Markets Authority advising them that the investigation would be “compromised from the outset” if it did not include wholesale gas prices.

“I am surprised that the CMA has suggested that it is ‘not minded to investigate’ the wholesale gas market, and I am writing to urge it to reconsider,” He told Mr. David Currie, the CMA’s chairman.

In correspondence, he suggested that gas was the main way if warming UK houses, and that gas-fired stations supplies much of the UK’s electricity.

“The CMA inquiry must not only ensure the entire energy market is operating competitively, it also has an important role to play in re-establishing confidence in an energy market that has lost the trust of consumers. Without tackling such a major part of the energy system – where one large player in particular plays such a significant role – the inquiry cannot hope to do this,” he penned.

His comments were being seen as a vague reference to Centrica, the owner of British Gas. This is the UK’s largest energy supplier supplying 11 million homes.

Centrica reported a 40% drop in pre-tax profits at their 1/2 results recently, and disputed the energy regulator Ofgem’s forecasts that the “big 6” energy suppliers would double their operating margins next year.

The Competition and Markets Authority reported that would go back directly to Mr. Yeo

Last November, the Financial Conduct Authority did not find any evidence that United Kingdom’s wholesale gas prices were being altered after a whistleblower suggested that traders had tried to manipulate the UK’s National Balancing Point gas price.