The energy watchdog, Ofgem, has widened its investigation into alleged manipulation of gas and power markets and warned that doubts over price-setting could lead to higher household bills.
Announcing the expansion of an inquiry that started in November following whistleblower revelations published in the Guardian, Ofgem questioned whether the agencies that report gas and power prices, which help determine the cost of energy trades, were “fit for purpose”.
It said that “a lack of confidence in the integrity of benchmarks may raise prices to consumers as the costs of risk from uncertainty may be passed through to them”. The watchdog warned of “more significant regulatory intervention” if self-regulation failed to answer its concerns.
The move follows dawn raids on one price reporting agency (PRA) and three oil companies by the European commission two weeks ago and allegations six months ago by a whistleblower of potential price fixing in the UK day-ahead gas market, used by big energy firms. Action by the energy regulator in London also comes 24 hours after it emerged the European commission plans to beef up control over oil and gas benchmarks.