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Oil company investigated

Ofgem calls for an urgent enquiry.

Ofgem has called for an urgent enquiry to investigate allegations that major gas suppliers have been withholding supplies to artificially push up prices.

The gas and electricity watchdog is seeking assurances that the swift rise in prices in recent weeks is not due to ‘market distortion’.

It has asked the European Commission to investigate why the gas pipeline between Britain and the continent has not been running at full capacity when demand has soared.

An Ofgem spokesperson said: ‘We are looking for answers to the recent inflation in prices.

‘We need to determine that the price movements have been caused by supply and demand factors, rather than any distortion of the market. Consumers need to be satisfied there are no signs the UK market is being manipulated from Europe.’

Ofgem will itself investigate why North Sea supplies from companies such as BP and Shell have been below expected levels.

BP and Shell have both denied manipulating the market.

BP said: ‘We have been working hard to ensure our infrastructure is working smoothly so that we can make available the maximum supplies of gas. We reject suggestions we have been involved in any attempt to raise gas prices or manipulate the market.’

The wholesale gas price has leapt fivefold over the past few weeks and wholesale electricity prices have increased 150 per cent as a result.

In September, British Gas announced it was putting up bills by 14.2per cent – equivalent to GBP96 on the average bill – with its rivals following suit soon after.

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