Britain exporting gas cheaper than it is importing it

Ofgem warns of UK energy security being 'undermined'

There are fears that household bills may continue to be inflated because of the fact that Britain is exporting gas that is fetching lower prices abroad and is importing gas from Qatar that is more expensive.

An analysis by the Guardian, conducted jointly with Greenpeace, revealed these figures, which Ofgem, the energy watchdog, believe may be undermining UK energy security because of this distortion in the market. The analysis examined the gas interconnector between the UK and Belgium; a major part of the country’s gas infrastructure, as it has the capacity to carry a fifth of the UK’s gas in winter. However, the report discovered that on over 40% of the days between December 2011 and October 2012, the gas was being exported to the continent despite the wholesale gas price in the UK being higher. Over this period, it is estimated that Britain exported over 15 times more gas than it imported.

Prices may continued to rise if market distortion isn't resolved, warn Ofgem

(Image source - www.offshoreenergytoday.com)

Analysis on monthly government data from Revenue and Customs showed that the UK was importing large amounts of Qatari gas, despite it costing up to 5% more than gas exported to the continent. Ofgem said ‘It is vital that gas on these links flows in line with market signals, to ensure security of supply for customers. However, initial analysis suggests the links are not always being used efficiently. On behalf of consumers, we are looking at all the evidence to establish the facts’. 

This news is the latest in a series of recent reports looking into the ‘dark and murky world’ (as described by Leila Dean of Greenpeace), of the UK’s gas market. In November, there were suggestions that, following the price hikes by the major energy companies, that gas prices were purposely being manipulated.

Homes set to ration energy

As average bills increase, many plan to go without heat this winter

Despite temperatures set to hit a 100-year low this winter, many people will ration their heating due to price rises.

Figures show the average heating bill has increased by 63% since 2008, putting millions in ‘fuel poverty’ and leaving them with the choice of paying for heating or having money for food. Last winter, around 75% of people asked said they would turn the heating down at key times, even if they were cold, just to save money. This year, nearly 90% claim they will do this, with elderly people more likely to go without heating.

Elderly people will be hit harder by rising energy bills over winter

(Image source - This Is Money)

This is why there is worry, as it is feared many elderly people, who are more likely to stay at home for longer periods thus using more heating, might die as a result of the cold, especially those without family who live alone. There were 25,700 ‘excess winter deaths’ last year in England and Wales, with around 2500 of them said to be as a result of ‘fuel poverty’ (where over 10% of income is needed to cover energy costs).

Energy comparison site uSwitch.com believe that further the price increases that were announced by the ‘big’ energy companies like British Gas and Scottish Power last month will ‘add £753 million onto energy bills and push another 314,000 households into fuel poverty’.

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.

Now is the time to switch!

With energy prices going up, make sure you find the right energy provider for you

Over the last few articles, we have discussed ways to save on energy bills in the home, with one of the main tips being to look at switching energy providers following the recent price hike by the major companies. By doing this, you the consumer can find the company with the best deal for you and can also fix your tariff, which in the long run will save you money.

According to a report in the Telegraph, nearly two-fifths of households are seriously considering doing this, with 49%  of people surveyed stating they were ‘angered’ by the price rises this month. MoneySupermarket found that a third of households were worried they could be pushed to breaking point financially due to the rises, as many people are also dealing with rising prices in food and mortgages. 

With Scottish Power, British Gas and Swalec being just some of the companies who have raised prices, now is the time to think about switching providers to make sure you get a deal that is both affordable and tailored to you. 

Money Saving Expert has a guide that gives you advice on how to calculate your energy needs and usage, and uSwitch is a site that lets you compare energy prices from various companies to find the right one for you.

So stop wasting your money and get your own back with

www.homereheat.com 

Energy prices hike increases inflation yet again

Rate had actually gone down but will rise by the New Year

The recent increases in energy bills from companies like British Gas and Scottish Power have caused the rate of inflation to rise once again.

The Consumer Prices Index stood at a three-year low level of 2.2% in September, down from 2.5% in August. However, with nearly all of the big energy companies in the UK increasing prices over the past few days, the figure is likely to increase soon to around 2.6%, meaning that by the New Year the cost of living in Britain will once again be higher.

For the full story, click here to go to the Evening Standard’s website.