Big industrial users reacted furiously this week to the gas regulator’s conclusion that price hikes of more than 50% this year were due to `the fundamentals of supply and demand’.
The Energy Intensive Users’ Group, which represents steel and chemicals manufacturers along with industrial gas producers, described Ofgem’s report as `a whitewash’ that had ignored or discounted its concerns that the market was being manipulated.
Ofgem head Callum McCarthy said last week that a review of the working of the new trading arrangements had shown that `recent high gas prices have been driven by the fundamentals of supply and demand’.
An outraged fuel buyer at one company said McCarthy had chosen to ignore the opinions of all but the largest gas suppliers. `Everyone except the big producers believes what we’re saying, He should lose his job.’
The Chemical Industries Association received a report last week from the Energy Links Consultancy, which concluded there was evidence of market manipulation. It cited the case of one large North Sea gas producer which had `conveniently’ shut down offshore production when demand was low.
`What is obvious is that Ofgem is refusing to investigate any of this,’ said a senior executive at another large gas consumer.
Ofgem has stuck by its report and said it did not accept the large users’ complaints.
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