The Sunday Telegraph: Energy chiefs to face MPs over gas price rises: “The committee's chairman, Martin O'Neill, told The Sunday Telegraph that he would start calling in senior players in the North Sea at the start of next month. "We can ask rather more rude questions than Ofgem. We shall be calling the likes of BP and Shell and holding them to account," he said.”: "The market is not working as it should and there has to be a reason for that. Something is amiss. Hopefully O'Neill will be able to glean some answers." (ShellNews.net)
By Andrew Murray-Watson (Filed: 10/10/2004)
The Commons Trade & Industry Select Committee is to question senior executives from a number of energy groups, including Shell, BP and Amerada Hess, over the recent steep rises in wholesale gas prices, even though Ofgem, the energy regulator, has found no evidence of market manipulation.
The committee's chairman, Martin O'Neill, told The Sunday Telegraph that he would start calling in senior players in the North Sea at the start of next month. "We can ask rather more rude questions than Ofgem. We shall be calling the likes of BP and Shell and holding them to account," he said.
"We will be looking at how the market for gas is functioning and we will have a wider remit than Ofgem, whose authority ends at the beach."
In a long-awaited report published on Tuesday, Ofgem said rises in wholesale gas prices could be partially explained by increased demand, the higher price of crude oil and market sentiment. It said it could find no manipulation of the spot market for gas that would have deliberately given the impression that supply was running short.
However, the watchdog said it was still investigating why gas deliveries from UK fields were lower than expected. It also called for help from European authorities to determine why gas imports into the UK did not increase in response to higher prices.
Ofgem's investigation centred on a period in October and November last year when wholesale gas prices rose to 25.2p per therm, 42 per cent higher than in the same period in 2002. Gas prices have continued to soar since then; forward winter prices for this year are approaching the 50p per therm level.
One senior industry figure said yesterday: "The current price of wholesale gas is inexplicable. Storage sites are full and there is more gas now floating about than there was last year.
"The market is not working as it should and there has to be a reason for that. Something is amiss. Hopefully O'Neill will be able to glean some answers."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/10/10/cnener10.xml