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| New Energy
Minister hints at Action on Gas Prices |
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Members of the EIUG met this
morning with new Energy Minister, Peter Hain, to press the case for a formal
investigation into cripplingly high gas prices. The meeting was also attended
by Jonathan Shaw MP (whose constituency includes a major paper works), and had
been arranged in response to colleague John Grogan MP's Early Day Motion on gas
prices.
Senior representatives of the chemical and paper
industries stressed the impact high gas prices were already having on their
businesses. Annual gas bills have risen by £300m and £50m
respectively for the chemical and paper sectors. Energy-intensive industries as
a whole are currently paying out an extra £10m per week as a result of
the surge in wholesale prices. The EIUG believes that there is now an
overwhelming case for a formal investigation into the wholesale gas market -
led by the OFT - which should cover structural problems that disadvantage
consumers as well as possible market abuse.
The Minister had cancelled a planned trip to the US in
order to keep today's meeting (which had originally been arranged with his
predecessor, Helen Liddell), and was clearly well informed on the issue. He
mentioned that he was made aware, when appointed to the job by the Prime
Minister, that the gas price issue would be one of his top priorities. He
confirmed that the government was very concerned about this, and that action on
a number of fronts could be expected sooner rather than later.
Following the meeting, Jeremy Nicholson, EIUG's economic
adviser, said that the EIUG was "very encouraged" by the meeting with the new
Minister; "He made it clear that the gas crisis is top of his priorities, and
we can expect to see action soon."
Notes to editors:
- Wholesale gas prices have doubled since last year, adding
over £500m to energy-intensive industry's annual gas bills. Most domestic
customers will be hit by a rise in their bills April, when price caps are
lifted.
- The EIUG met with the OFT on 23 January to press the case
for a formal investigation into gas prices. Key issues for any such
investigation would be offshore market power and the influence of the
interconnector (the pipeline between the UK and the continent, where gas prices
are indexed to those for oil).
- For further information please contact Jeremy Nicholson
on 020 7343 3159 (direct line), 07785 280 568 (mobile) or secretary on 020 7343
3161.
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