Ofgem Report Fails to Explain Uncompetitive UK Gas Prices
Press release issued Tuesday 5th October 2004 – 13:00pm
After a year of work, Ofgem has failed to explain why half of the recent surge in UK gas prices has occurred. Wholesale gas prices in the UK have risen 70% over the last 18 months and are now 40% above continental levels, where prices are indexed to fuel oils. UK manufacturers have been left at a severe competitive disadvantage compared with our European neighbours.Rising oil prices provide no explanation for UK prices being higher than those on the continent.
Tightening UK gas supplies are not an explanation either, since the UK produces more gas than it can consume and, on an annual basis, remains a net exporter.Commenting on today’s report, EIUG’s Director Jeremy Nicholson said: “Consumers have every right to feel let down by the regulatory regime. While UK manufacturers are getting a raw deal, Ofgem has failed to appreciate the seriousness of the situation or to say why it is happening.”
Notes to editors:
- The EIUG represents the UK’s industrial sectors for which secure internationally competitive prices are a matter of commercial necessity.
- Industrial consumers are facing 30-40% increase in the costs of their gas supplies over the year ahead, adding over £1bn to the UK’s industrial production costs. Rising wholesale gas prices are also a major contributor to the increase in wholesale electricity prices, which have risen 50% over the last 12 months.
- For further information, please contact Jeremy Nicholson (tel. 07785 280568).