A whistleblower has alleged that the wholesale gas markets in the UK have been “regularly” manipulated by energy companies, according to an exclusive in the Guardian.
The FSA and Ofgem are both investigating the claims, which were made by an employee of ICIS Heren, a company that provides data on energy prices for the industry and sets benchmarks for prices.
The Guardian reports that the alarm was raised after the whistleblower noticed, “attempts to distort the prices reported by the company”.
The benchmark prices provided by ICIS Heren have a critical role to play in determining energy companies’ prices, because wholesale gas contracts can be based on them.
The whistleblower said that the some of the Big Six are among the names quoted by traders as being involved in the alleged manipulation.
This is an incredibly serious allegation, which will do little to boost the confidence of the public in the energy market, which is low as it is. We look forward to seeing the results of the FSA and Ofgem’s investigations, and hope that they come as swiftly as possible.
The Energy Secretary, Ed Davey, said:
“I am extremely concerned about these allegations and will be keeping in close touch with the regulators while they get to the bottom of this”
A DECC spokesperson added:
“The government takes alleged abuse in our markets very seriously.
“It’s important not to pre-empt the work that the enforcement agencies already have underway to assess the detail of the allegations made.
“The FSA and Ofgem have a range of powers available to them and have our full support in applying the law and ensuring that any wrongdoers are held to account.
“DECC officials and Secretary of State Ed Davey have been in close contact with the FSA and Ofgem since we became aware on Friday [9 November].
“We stand ready to support their work and provide any assistance that we can.
“The government has a strong record in providing the regulators with powers to regulate conduct in our markets. Where gaps in powers have been identified, action has been taken.
“We acted swiftly to tackle the attempted manipulation of LIBOR and EURIBOR and we are in the process of giving Ofgem more powers to tackle abuses, including the EU REMIT legislation. These powers will be in place ahead of schedule by the spring, making the UK one of the first countries to do this.
“If further steps need to be taken, then that is what we will do.”
Mr Davey will make a statement in parliament tomorrow.
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