British Gas to be Split as Government Questions Sector Pricing
By Anne Lewis-Schneider
Several comments have been made, such as British Gas is charging some of the highest prices, and that regulators are busy with a competition investigation, and in reply British Gas have said that they welcome the reviews.
Britainís Energy Secretary Mr Ed Davey has said that there is a possibility that British Gas may be broken up because of excessive profit margins that are being charged by British Gas which used to hold the monopoly for gas in the UK. This is in response to reports from industry regulators in their energy review a week ago.
The continuing soaring energy costs which saw opposition Ed Miliband pledge in September of last year to freeze energy prices for 20 months if his party is elected in the next elections, has become a major issue in the UK. The next election is to be held in the UK in 2015.
According to a letter sent to Ofgem by Ed Davey he says that there is evidence that British Gas which has the lionís share of gas supply in the domestic market has tended to charge the highest prices consistently for the last three years and is also on average the most profitable of the gas suppliers in the UK. Britain has been trying to put a stop to unfair pricing and will go as far as breaking up any company found to be monopolising a market and in the process harming the consumer in any way.
The LibDem party is trying to be a buffer between David Cameronís Conservative party and the Labour party to minimise friction. The Big Six Energy Companies that are made up by SSE, EDF, RWE Npower, British Gas, E.On and Scottish Power, have been made well aware of the price freeze promised by Ed Miliband which he says will put a stranglehold on electricity and gas suppliers. Ofgem is currently investigating competition in the retail energy sector. British Gas maintains that it is necessary for them to have an average of 5% profit to be able to invest in and secure energy supplies for the future.
Analysts have said that Ed Davey is using figures that have long been released to fuel the argument for political gain. The DECC have looked at figures from Ofgem that put gas profit margins for last year at 5 times that of electricity. The results of the competition enquiry will be made known at the end of March and until then Ofgem have said that they will not comment on it.
Head Office: EATON HOUSE, STATION ROAD, LEEDS, LS20 8XB Company Registration: 4704157 Vat Registration: 817013852