Ofgem to probe gas price surge

ENERGY regulator Ofgem has launched an investigation after fears that the price of gas is being manipulated.

The wholesale price has soared by 80% in recent weeks, and peaks in October of 34p a therm are reckoned to be about 50% higher than normal for the time of year.

Ofgem today warned that if the wholesale price stays high - delivering massive profits for big producers such as Shell and BP - it will feed through to higher household bills.

Ofgem's new chief executive Alistair Buchanan said: 'We are carefully examining why, when demand for gas is not particularly high and the supply of gas is not low, we have seen prices rise from 15p a therm to 34p.'

Gas traders said the market had recently had the jitters over negative comments about the amount of gas the UK will have to import in future years.

'We have had several outages [gasfields out of commission] including the giant Brent field, and prices have been higher in Europe,' said one trader. 'The rise here has been more a case of sentiment rather than fundamentals.'