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November 13, 2012 at 09:26 AM
Britain faces yet another inquiry into price rigging–this time in energy markets. The Financial Services Authority has said it is investigating allegations that the country’s six largest power companies are involved in rigging the prices of natural gas and that the benchmark prices produced by a single company are unreliable.
Bloomberg reported Tuesday that after price-reporting company ICIS Heren said in October that “unusual trading activity” may have affected gas prices, the FSA undertook an investigation. Next-day natural gas prices in the U.K. have gone up by 24% in 2012 during seasonal demand increases as well as supply disruptions from Norway.
Energy Secretary Ed Davey said in the report that the government is “extremely concerned” about the possibility that manipulations of the wholesale natural gas market may have been perpetrated by some of the largest power companies in the country.
In a statement, Davey said that the FSA had notified the government of its investigation and that his office would not interfere. The statement said in part, “I am extremely concerned about these allegations and will be keeping in close touch with the regulators while they get to the bottom of this.”
