The government last night turned up the heat on Centrica, the dominant player in Britain's gas industry, following a string of complaints about high prices, particularly from industrial and commercial consumers.
Energy minister Brian Wilson, who is pressing for greater gas liberalisation in Europe, warned that officials would be taking a close look at the domestic market - where Centrica, trading as British Gas, retains a 70% share - after a European commission report gave a clean bill of health to the operation of the UK/Belgium gas interconnector.
Commercial users have complained that gas prices soared following inauguration of the interconnector, which is operated by some of the biggest names in the energy industry. But there have also been worries at the impact made on prices by the introduction of auctions to secure entry capacity to the national transmission system in the UK, operated by Transco, part of Lattice. Despite DTI concerns about the general level of gas prices - and specific worries about unexplained price "spikes" - the commission concluded yesterday that there was no sign of anti-competitive behaviour by interconnector shippers.
The minister, who has carried out a separate consultation into users' complaints on gas prices, welcomed the commission's findings. He said it was essential that the British market had confidence in the operation of the interconnector - particularly as Britain becomes more dependent on gas imports.
But, in a strong warning to the industry and Centrica especially, he said the DTI was aware of general concerns about the operation of the gas market in the UK.
The interconnector - linking Zeebrugge with Bacton in Essex - has an export capacity equivalent to 20% of Britain's annual gas demand. On days of heavy demand it can supply up to 5% of the country's gas needs.
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