Can the gas wholesale market be trusted?

A whistle blower has revealed that gas companies have been able to manipulate gas prices at a wholesale level to maximise profits for the companies. The wholesale UK gas market includes gas from the North Sea, Norway, or arriving in the UK by ship as liquefied natural gas. All of the UK gas companies buy this gas at a wholesale price and then sell on as part of their services to businesses and domestic users.

Analysts say that most of the trading of wholesale gas is done between companies themselves, and while this allegation claims that traders made unrealistic bids for the gas to the wholesalers, it is easier to manipulate the cost directly between suppliers. It can be done by making lots of small trades to artificially reduce the rate.Ofgem and the FSA are investigating the allegations of the whistle blower, Seth Freedman, the company he works for, ICIS Heren detected unusual trading in September. Mr Davey the Energy Secretary has said that would be in close contact with the investigators as, “..consumers deserve markets that are fair.”The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.