Have energy companies been rigging prices?

PM threatens heavy fines for companies found to be manipulating market

David Cameron has called for heavy fines against all energy companies that are found to have rigged gas prices in the UK. 

The Prime Minister’s view comes after the Financial Services Authority announced an investigation into several major power companies that are accused of manipulating the wholesale gas market in Britain. Nick Clegg, deputy prime minister, backs Cameron’s stance, saying that consumers would be ‘rightly dismayed’ if the allegations of price rigging are found to be true.

Many of the companies accused of price rigging increased their prices last month

(Source - The Telegraph)

The FSA launched their investigation after word of ‘unusual trading patterns’ was revealed by whistle-blower Seth Freedman, who worked as price reporter at ICIS Heren, a company who set benchmark prices that wholesale gas contracts are based on. ICIS Heren reported to energy regulator Ofcom concerns about suspect trading on 28th September, which is the date of the end of the gas financial year and therefore an important influence on future gas prices.

This investigation will do little to improve the strained relationship between the energy companies and their consumers, which was already damaged following last month’s gas price hike.