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'Firm action' promised if gas price rigging allegation is proven

By Western Daily Press  |  Posted: November 14, 2012

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Those involved in the alleged rigging of Britain’s wholesale gas market will face the “full force of the law”, Energy Secretary Ed Davey warned.

Mr Davey promised “firm action” if there was any truth in allegations of gas price manipulation made by a whistleblower to the Financial Services Authority (FSA) and energy watchdog Ofgem.

In a statement to MPs, Mr Davey said: “I see it as my job to protect consumers, not least the most vulnerable who can suffer the most when markets are abused.”

He said it was not possible to understand what impact any attempted manipulation, if proven, had on the market or prices paid by consumers.

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But the Government had “absolute determination to clamp down on any abuse that is uncovered, wherever and by whoever”.

Prime Minister David Cameron’s official spokesman said that if the claims were true then regulators should come down “very hard” on those responsible. He added energy price manipulation was “totally unacceptable”.

All six of the big energy companies have released statements denying any involvement in attempts to fix the £300 billion market.

The industry trade body, Energy UK, which represents the companies, said its members would co-operate fully with the regulators.

Angela Knight, Energy UK chief executive, said: “This is a very serious issue which must be investigated swiftly.

“The gas market is an international one with many overseas companies trading on it as well as organisations that are not energy companies. Customers need to have confidence in markets and authorities need to have the powers to regulate well and take action if required.”

The FSA and Ofgem are both looking into allegations made by whistleblower Seth Freedman, who worked at ICIS Heren, a company responsible for setting so-called benchmark prices. Mr Freedman raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company.

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