As whistleblower claims emerge that the UK’s £300 billion wholesale gas market has been manipulated by large power companies, Welsh Labour Member of the European Parliament, DEREK VAUGHAN has joined calls for an EU wide investigation into energy market manipulation.
The Financial Service Authority has confirmed that it is investigating reports that deliberate attempts were made to distort energy prices on a regular basis.
Speaking from his Wrexham office, Mr Vaughan said:
"These revelations strongly echo the recent Libor crisis and appear to be market abuse and price manipulation in the pursuit of short term profits at the expense of hard pressed consumers.
There have long been suspicions of rigging and price-fixing in the commodities markets and if companies are found guilty of such conduct then they must face the full force of the law including fines, sanctions and jail sentences.
Whilst the allegations relate to the UK marketplace only, given that only last week Barclays were fined $470 million for allegedly doing the same thing in the US wholesale energy market, we urgently need the European Commission to take tough action on an EU scale to ensure that there is no repeat here."
Adding that Welsh consumers may be feeling the effect of wholesale price fixing, Mr Vaughan commented:
"Over a quarter of Welsh households, equating to 332 000 families, are facing fuel poverty and making decisions on a daily basis to find enough money to pay their gas bills to keep warm. They have seen gas and energy prices rise by between 6 and 9% this year, increasing bills by an average of £200 per annum.
Whenever there is an increase in prices for the consumer, companies always cite a rise in the wholesale price as justification. If wholesale prices are being manipulated in this cynical way to increase the profits of the major energy companies, then sadly it is Welsh consumers that are ending up paying for it."