Time to examine gas price profits

ENERGY SECRETARY Ed Davey has called on regulator Ofgem to examine the profits the so-called Big Six energy companies make supplying gas.

In some cases, profit margins are five times higher for supplying gas than they are for providing electricity.

All the Big Six energy firms have been pilloried for their profiteering when much of the country is struggling to pay its fuel bills.

British Gas is by far the biggest accounting for 41% of UK gas supplies.

Mr Davey said that if profit margins for gas were pegged at the same level as those for electricity then it could save every household £40 a year.

This is not a huge amount, but hardly to be sniffed at when many people across the UK have to choose between heating and eating. But Mr Davey did not stop there. He said there is evidence that British Gas, as the largest supplier, has charged the most for gas over the past three years and consequently made the most profit.

If, he said, the regulator found this was evidence of an effective monopoly then the company could be broken up.

Shares in British Gas’parent company Centrica fell in the wake of Mr Davey’s statement and the company has rejected his claims, claiming the UK energy market is one of the most competitive in the world. Consumers will not be convinced. Many feel that all six companies work in tandem to raise or lower prices and that there is no real choice for customers at all.

They, at least, would welcome more competition in the market, even if shareholders in British Gas may not.

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