UK energy companies investigated for price fixing
Energy regulator Ofgem and the Financial Services Authority (FSA) are investigating the possibility of price fixing among the UK’s big six energy companies - British Gas, Scottish Power, Npower, SSE, EDF and E.ON. All of the energy suppliers have denied being involved. The investigation will question how market prices are set and determine if energy companies are profiting from the market.
The probe has been launched after allegations were made that the wholesale gas market is being regularly manipulated. Energy companies purchase gas at wholesale prices and then sell it to domestic users and businesses. A whistlebower, who worked for a financial information firm that publishes reports on energy prices, told the Guardian that there were several unusual trades in the market on 28 September. They claim that the dealers made unrealistic offers, trying to set gas prices.
Energy Secretary Ed Davey says that he asked the regulators if the energy companies need more authority. In a Parliament statement, he said that they will act if they find that more powers are needed. There are powers to take on individuals and businesses which are guilty of wrongdoing, and they will use these depending on the results of the investigation.
The government has been pushing energy suppliers to get control of costs after SSE Plc and Centrica, which owns British Gas, raised prices for customers. Deputy Prime Minister Nick Clegg says that he doesn’t think the situation could be exaggerated if the probe finds that the companies have been fixing prices. Gas is one of the biggest bills for households and businesses at this time of year. If evidence of price fixing is uncovered, people will be enraged.