HL Deb 23 June 2004 vol 662 cc126-7WA
Lord Dubs

asked Her Majesty's Government:

What is their assessment of the recent causes of volatility in United Kingdom wholesale gas prices and the related fluctuations in domestic prices; and whether there are any proposals to bring stability to the market. [HL3184]

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)

Wholesale gas prices over the last few months have not been significantly different from prices in the equivalent period last year.

On 28 May Ofgem issued an interim report, Wholesale Gas Prices in October and November 2003, available on Ofgem's website at: http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/7288 11804.pdf

Ofgem has closed down lines of enquiry such as the effect of rising oil prices and gas market sentiment associated with the UK's transition to net imports of gas. However, it did not rule out those factors as having possibly put upward pressure on last autumn's prices.

Ofgem is now concentrating on analysing the impact on last autumn's prices of a possible change in the composition of gas supply. It has informally requested information from some UK continental shelf producers and Bacton-Zeebrugge Gas Interconnector shippers. Ofgem has also invited comments on the increasing level of forward prices for winter 2004–05.