The UK Has Till TheEnd Of The Month To Put Stronger Energy Laws In Place
By Leigh Teixeira
So far, the UK government has failed to put measures in place that will stop abuse of the gas and oil market more than a year and half after it was requested to do so. There have been a number of complaints regarding price fixing in the industry.
According to the European Union’s laws for the Regulation on Wholesale Energy Markets and Transparency must be put into effect by the end of June this year. This means that the UK government has less than one month to comply with these regulations.
Ofgem, the UK’s energy regulator, will be imposing harsher measures on the industry thus making it simpler to pick up on manipulation of the market and insider trading. One of these measures would be demanding that any trade deals which take place need to be publically reported.
In May, the European Union’s competition authorities searched the offices of Shell, BP and Statoil because of accusations that these companies were involved in price fixing along with Platts, a price reporting agency.
In November of last year Ofgem was working with the Financial Services Authority, which at the time was the City watchdog, were investigating the wholesale gas industry after having received reports about unusual trading patterns over key periods on the industry’s trading calendar.
The shadow energy and climate change secretary, Caroline Flint said last week that it is hard to believe that after all this time the UK government still has not done anything to prevent this sort of activity from happening within the industry in future. Members of the Labour party have been advising ministers of parliament for a number of months that vague trade deals which rely on the price reports of agencies makes it easy for companies to abuse the market. Ms. Flint says that consumers should be certain that what they are paying for essentials like petrol and their energy is fair and is not under the manipulation of the traders. She adds that there is no need for ministers of parliament to further delay the implementation of measures to prevent manipulation.
The Department of Energy and Climate Change, says that to implement the Regulation on Wholesale Energy Markets and Transparency, a lot of work would need to be put in by the government’s legal team. This will take time as this piece of legislature is complex.
A spokesman for the department says that the government intends to beat the deadline and the new legislature could be put into effect by next week.
The head of energy at SGH Martineau law firm, Andrew Whitehead said that to put the legislation into effect will definitely be complicated. Part of the reason for this is that it was very broadly written and doesn’t include a lot of detail. He said that a number of his clients have improved upon their procedures, regarding compliance, to ensure they are ready to handle any new law that is put into effect.
Other problems that are currently being faced by the UK’s energy industry will be emphasized this week as the energy bill is brought into the House of Commons for its third reading.
The energy bill is intended to lower carbon dioxide emissions, to ensure the lights in Britain remain turned on and to keep energy bills as affordable as possible.
Next week might see the much anticipated agreement on what the “strike price” between EDF Energy and the Government will be. Should both parties agree on an acceptable price it would see the construction of the nuclear power plant in Somerset at HinkleyPoint
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