APPENDIX 31
Memorandum by the University of Leicester
You will no doubt be aware that the UK is suffering
some of the highest gas prices in Europe, with increases in the
order of 100% seen in the past two years. This is affecting domestic,
commercial and industrial consumers alike, and is particularly
acute for large-scale gas consumers.
The University of Leicester's experience of
its tendered contract gas price increases is 21% effective from
1 January 2004 compounded by a further 34% increase at 1 January
2005. This reflects an increase in costs from £620,000 to
almost £1 million per annum plus VAT.
I am also aware that autumn 2004 gas contract
renewals, negotiated for the sector by the universities' purchasing
consortiums, produced tendered prices that showed increases of
60% to 80%, and one university had an initial quotation of 110%.
Further, there is currently little competition within the gas
industry, with often only the incumbent supplier being prepared
to quote contract renewal terms.
I see no logical reason for excessive gas prices
in the UK, particularly as the gas we use is supplied from the
same gas fields that supply the Continent. However, industrial
and commercial consumers abroad are currently paying on average
35% less for their gas. It is clear that industrial, commercial
and domestic consumers in the UK are at a significant disadvantage
and urgent action must be taken.
I am aware that the Trade and Industry Select
Committee is due to meet and report in the very near future and
would like the concerns and fears of the University of Leicester
as mentioned above to be a matter of urgent consideration.
Professor Robert G Burgess
Vice-Chancellor
14 December 2004
| 
