Those involved in the alleged rigging of the UK’s wholesale gas market will face the “full force of the law”, the Energy Secretary has warned.
Ed 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 regulator Ofgem.
In a statement to MPs, he added: “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, but the Government had “absolute determination to clamp down on any abuse that is uncovered, wherever and by whoever”.
Prime Minister David Cameron’s spokesman said if the claims, first published in the Guardian, were true then regulators should come down “very hard” on those responsible. He added that energy price manipulation was “totally unacceptable”.
All six big energy companies have released statements denying any involvement in attempts to fix the £300bn market and industry trade body, Energy UK, which represents the firms, said members would co-operate fully with the regulators.
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. He raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company.
Ofgem was warned by ICIS Heren that it had seen evidence of suspect trading on September 28, the date that marks the end of the gas financial year.
Prices apparently went down by about 0.4 per cent that day – a key date in influencing future prices.