The big gas companies have been manipulating the £300 billion gas market, a whistleblower says.
Wholesale gas trading is a huge business and partly decides how much we are charged for the energy we use in our homes. All this trading is electronic and instant—it doesn’t involve any actual gas changing hands until much later.
Whistleblower Seth Freedman worked for energy information firm ICIS Heren. It takes a snapshot of the market once a day. This is called “price reporting” and is used to set prices for long-term gas contracts.
Freedman noticed that market prices would drop just in time for the “window” when it asked traders to report their current prices. The market would then bounce back just minutes?later.
This meant that even the smallest price movements on the market for a few minutes could allow firms to make millions when they later buy gas at a lower price.
The whistleblower forced ICIS Heren to warn energy regulator Ofgem of the apparent attempts at price manipulation. Separately the Financial Services Authority is set to investigate the market.
Energy usage is actually going down—but despite this the energy companies’ profits have soared. nPower alone doubled its profits in the first nine months of this year. Now this week the firm’s gas price rise of up to 11 percent is set to take effect.
It comes as the Tories threaten to withdraw winter fuel payments, forcing people to choose between heating and eating. They plan to bring in a “temperature criteria”, withdrawing the payments from parts of Britain that are warm in winter—wherever those are.