BBC News, 12
November 2012
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The energy secretary said he could closely follow the two investigations |
The
investigations by the FSA, the UK's financial watchdog, and energy regulator
Ofgem follow claims by a whistleblower.
Energy
Secretary Edward Davey said he was "extremely concerned about the
allegations".
"The
government takes alleged abuse in our markets very seriously," he added.
Three of
the UK's big six energy suppliers have released statements to deny any
involvement.
EDF Energy
said it "does not participate in loss-leading trading activity and
considers it to be against existing market regulation".
It added:
"We make information likely to impact market price formation publicly
available on our website in compliance with the European Union's regulation on
energy market integrity and transparency."
NPower
said: "There is an explicit commitment in our code of conduct to comply
with all laws and regulations."
Scottish
Power said that it had "never engaged in trying to fix wholesale gas
trading markets", adding: "Our trading division always acts with
integrity and follows all rules in all of its engagements with the
market."
The
wholesale gas price is the cost to the energy providers of the gas they buy
from the wholesale gas market. This market includes everything from the UK's
own North Sea gas supplies, to gas piped into the UK from continental Europe,
and gas arriving in the UK by ship as liquefied natural gas.
The alleged
manipulation is said to have lowered the wholesale price, and as such does not
imply any knock-on impact on the retail price paid by customers.
'Considering
evidence'
The
Guardian newspaper, which received a separate tip-off from the whistleblower
behind the allegations, said the investigations was into "some of the big
six" energy providers, but the brief statements released by both Ofgem and
the FSA do not name any companies.
The FSA
said: "We can confirm that we have received information in relation to the
physical gas market and will be analysing the information."
Ofgem also
said it had "received information" and was looking into the issue. It
added that it would "consider carefully any evidence of market abuse that
is brought to our attention as well as scope for action under all our other
powers".
Mr Davey
said he would keep in close contact with the two investigations.
He will
make a statement on the issue in the House of Commons on Tuesday.
The
whistleblower, Seth Freedman, worked at ICIS Heron, a financial information
company that publishes energy price reports.
ICIS Heron
said it "detected some unusual trading activity on the British wholesale
gas market on 28 September 2012, which it reported to energy regulator Ofgem in
October".
It added:
"The cause of the trading pattern, which involved a series of deals done
below the prevailing market trend, has not yet been established.
"If
anyone was to benefit from this it would have been derivatives traders."
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