Select Committee on Business and Enterprise Eleventh Report

2  The wholesale gas market

11. Gas-fired power accounts for around a third of the UK's generating capacity, and tends to provide the marginal source of generation to the market. This means that the wholesale gas price determines the wholesale price of electricity, and is the most important contributing factor to UK energy costs. In other words, the competitiveness of the wholesale gas market affects the competitiveness of the UK's energy markets as a whole.

Recent prices

12. Natural gas is bought and sold in the UK by a number of means—on the spot market, through forward and futures trading, and under off-market contracts. Accordingly, there are a variety of ways in which it is possible to analyse movements in prices. Figure 1 below charts the UK Natural Gas Index, produced by ICE Futures Europe. It shows that the wholesale gas price on the futures market has risen markedly since Spring 2007, from a trough of less than 20 pence per therm (p/th) to more than 60p/th in recent months. The daily spot price of gas, which balances real-time supply and demand, has followed a similar trend with huge levels of intra-day volatility as a result of unpredictability in the flow of gas to the UK.[13]

Figure 1: UK Natural Gas Price Index

Source: ICE Futures Europe

13. At their present level, wholesale gas prices are significantly higher than supply costs, which may be as low as 15p/th (+/- 30%).[14] In the following sections we consider the factors contributing to current price levels in the UK. These include both market fundamentals affecting supply and demand, and factors that are distorting the functioning of the market.

The UK gas market

14. Gas trading in the UK takes place via the National Balancing Point (NBP), which provides a virtual trading location for buying and selling into and out of the UK transmission system. Ofgem told us that the UK's wholesale gas market has become the most mature and liquid energy market in Europe since its liberalisation in the 1990s.[15] Liquidity refers to the ease with which an asset can be converted into cash, without a price discount. On average, a unit of gas is traded 11 times via the NBP before delivery, with over 11,000 TWh of gas traded in 2007/08.[16] Figure 2 below, shows how GB gas trading volumes compare with those in Europe.

Figure 2: GB and European annual gas trading volumes (over-the-counter[17])

Source: Financial Services Authority

15. We received contradictory figures for exactly what proportion of gas delivered to the UK is openly traded via the NBP, as opposed to through off-market long-term contracts. Energywatch stated that only 30% of UK gas is traded, whereas Ofgem told us the figure was closer to 60-70%—up from 20% in 2000.[18] Shell told us it trades 20-25% of its gas supply to the UK; another 40% is delivered via NBP-linked one or two-year contracts; and the remaining 35-40% is through 'old-style' longer-term contracts, such as field depletion contracts.[19] We are troubled by the apparent discrepancy between the figures cited by our various witnesses on the extent to which gas is delivered to the UK via off-market contracts, as opposed to the visible market. The absence of consensus on such a basic characteristic of the market makes it difficult to reach secure public policy conclusions about desirable interventions.

16. Whatever the actual proportion of gas delivered to the UK traded via the NBP, it is clear that the bulk of trading is focused on the spot market, i.e. close to the time of delivery of the product.[20] A number of witnesses noted the lack of participants in the forward market, for example for gas contracts a year ahead of delivery. Energywatch told us poor liquidity results in a lack of confidence in reported prices, and in gas producers and suppliers attaching high risk premiums to forward contracts.[21] The Chemical Industries Association told us: "Forward contracts are either unavailable or have such a large risk premium that chemical industry users cannot afford to buy/use gas at that price, and of necessity rely largely on spot-linked contracts".[22] This exposes industrial consumers to volatility on the spot market. Ofgem noted that the focus on spot trading for gas is not unusual, as the market for crude oil exhibits a similar pattern.[23] However, Energywatch told us that forward gas trading has been systematically choked off by the large gas producers over the last six years as consolidation has taken place within the industry.[24] Our predecessor Committee highlighted the lack of liquidity in the forward market in its 2005 Report on security of gas supplies.[25] This lack of liquidity is particularly significant since the Major Energy Users' Council told us prices on the forward market are used by suppliers to determine their contract offers to industrial consumers, despite those prices being based on low traded volumes.[26] This is an issue that also affects other large-scale consumers, including the public sector. For example, the NHS Purchasing and Supply Agency noted that there is "no effective longer-term market" for gas.[27]

17. While the UK has one of the most liquid spot markets for gas in the world, industrial consumers and Energywatch have significant concerns about the lack of liquidity in the forward gas market—an issue our predecessor Committee raised in 2005. Given the apparent impact on the prices major users pay in comparison to their competitors on the Continent, we recommend that Ofgem investigates urgently why gas producers seem unwilling to trade in the forward market. This investigation should include the wider market effects of both the lack of price transparency for forward contracts and the risk premiums attached to them. If Ofgem is unable to reach firm conclusions or suggest appropriate remedies, it should consider a referral of this aspect of the wholesale gas market to the Competition Commission.

Increasing gas dependency

18. The UK is becoming increasingly dependent on imported gas as its North Sea reserves are gradually depleted. Whereas in 2003/04 imported gas accounted for just 2% of UK demand, in 2008/09 it is expected to contribute almost 40%.[28] By 2018, 80% of the UK's gas needs will be met by imports.[29] In recent years additional infrastructure has come into operation to allow greater gas imports into the UK. These include:

  • Interconnector UK (IUK), completed in 1998, connecting Bacton in the UK to Zeebrugge in Belgium;
  • Bacton-Balgzand Line (BBL), completed in 2006, connecting the UK to the Netherlands;
  • Vesterled and Tampen Link pipelines, connecting Norwegian gas fields to the UK at St Fergus in Scotland;
  • Langeled pipeline, completed in 2006, providing further import capacity from Norway;
  • Isle of Grain liquefied natural gas (LNG) import terminal in Kent, converted from a storage facility in 2005; and
  • Teeside LNG import facility, which allows supply of LNG direct from ships.

In the next few years additional LNG import capacity will be available at the Isle of Grain and Milford Haven in Wales. Ofgem told us that next year the UK will have 180 billion cubic metres (bcm) of potential annual supply, against potential demand of around 100 bcm.[30]

19. The implication of the UK's growing gas import dependency is that it must increasingly compete in European and global markets. This means the UK gas price is influenced by changes in supply and demand in other countries. Also, where market distortions exist in other countries, such as the oil-gas price link in Europe, which we discuss later, this too will affect the UK gas price. The existence of import capacity does not necessarily guarantee the flow of gas to the UK. Rather, this is determined by market attractiveness and willingness to pay.[31] BP told us "greater reliance on imports of gas is bound to necessitate higher consumer prices, despite the various infrastructure enhancements coming on stream".[32]

Market concentration

20. One way of assessing the competitiveness of the wholesale gas market is by looking at the level of market concentration, as the more concentrated a market is, the weaker competitive influences are likely to be. This can be measured using the Herfindahl-Hirschman Index (HHI), which ranges from close to zero (perfect competition) to 10,000 (a one firm monopoly).[33] As a rough indicator, a moderately concentrated market would have a score of above 1,000, and a highly concentrated market would have an HHI of over 1,800. Ofgem provided us with its estimates of the HHI for different parts of the wholesale gas market, shown in Table 1 below.[34]

Table 1: Estimated market concentration by supply source
Supply source Estimated HHI
UK Continental Shelf (UKCS) 704
Interconnector UK (IUK) 1,164
Bacton-Balgzand Line (BBL) 4,400
Overall wholesale gas market 430

Source: Ofgem analysis[35]

21. Table 1 shows that the overall level of market concentration is relatively low, which fits with Ofgem's estimate that around 120 firms are currently active in supplying gas to the GB National Transmission System. However, there are relatively few market participants for certain sources of supply, such as Norway, BBL and LNG imports, which means concentration levels in particular areas are high. This may be a concern at times when these sources provide the marginal capacity, and hence set the market price. However, Ofgem made the following points:

  • There are few days during which these sources are the marginal source supplying peak demand;
  • The supply market overall has relatively low concentration;
  • Total supply is in excess of peak demand; and
  • Each source usually has some additional margin which they can supply to the market.

22. Whilst the overall level of gas market concentration is relatively low, current figures provide only a snapshot of a rapidly evolving market. Market concentration in the supply sources on which the UK will become more dependent in the next few years are much higher than that for the UK Continental Shelf. Ofgem must monitor this situation closely, particularly if the marginal source of supply to meet UK demand increasingly comes from these highly concentrated markets.

23. Ofgem states that in examining the competitiveness of the gas supply market it is worth noting that "at certain price levels a demand side response occurs" and that this can "act as an additional brake on potential market power".[36] The regulator should remember that this brake has a very real social and economic cost. We cannot form public policy in a world of energy shortages and sharply rising prices on the complacent assumption of a "demand side response". The gas price spikes of winter 2005/06 were cited as a key factor by the industrial energy user groups in the loss of around 100,000 manufacturing jobs in the months that followed.[37]

LNG import capacity

24. Whilst LNG imports provided less than 5% of the UK's gas supply in 2007/08, this is expected to rise to 35% in the next 10 years as new import infrastructure comes into use.[38] LNG is likely to play an increasingly important role as a marginal fuel source, particularly during the winter months.[39] In order to attract LNG cargoes to the UK, prices here will have to be competitive in the global market. Currently the UK's main LNG import facility is at the Isle of Grain. Since February 2006, BP and Sonatrach, which each have contractual first rights to half the delivery slots at the terminal, have used 63 out of 127 available slots for LNG importation. None of the remaining slots have been taken up by third parties.[40] This was a particular concern for INEOS ChlorVinyls and the Energy Intensive Users' Group (EIUG), which noted that the terminal has seen almost no use in 2008.[41] In evidence to us, BP confirmed that it had used only one of 13 available slots this year.[42] The main reason for the lack of use of the Isle of Grain terminal seems to be that other countries have been prepared to pay more than the UK for LNG cargoes. In particular, for different reasons, Japan, South Korea, China, India, Turkey and Spain have all increased their demand for LNG this year.[43]

25. However, the large industrial energy consumers raised their concern that the so-called 'use it or lose it' access arrangements for the Isle of Grain do not provide sufficient time for third parties to take advantage of available slots.[44] Ofgem told us it had not been made aware of this issue, despite consulting on the operation of the access arrangements last year. Moreover, it noted that the UK's other main import facility at Teesside, owned by Excelerate Energy has not taken any deliveries recently either.[45] The EIUG said it believed Ofgem was aware of concerns over the Isle of Grain facility.[46] Yet Ofgem's Chief Executive mistakenly told us there was no evidence that the facility was not being used.[47] Although we welcome the subsequent corrections, we are concerned that Ofgem did not appear to be fully aware either of the concerns about LNG import facilities or the extent to which they are being used.[48] The possibility of regulatory and contractual obstacles preventing the full use of the Isle of Grain facility is very real. For example, LNG supply to the terminal appears to be hampered at present by both the existence of preferred supplier agreements and the inadequate notice period for available slots.[49] Whilst investors in LNG import capacity need to retain the right to use it, in the current tight market conditions any obstacles to third parties cannot be allowed to go unchallenged.

26. The Isle of Grain LNG import terminal has seen little use this year. It is possible the regulatory framework for the use of the facility is part of the reason why LNG cargoes are not coming to the UK. Ofgem should investigate the situation with a view to making any necessary changes. Moreover, if international price competition can so easily drive cargoes elsewhere there must be doubt about the extent to which new capacity, such as Milford Haven, will provide the anticipated benefits in terms of security of supply for winter 2008/09. Ofgem and the Department should explore the possibility of such diversion of supplies to inform other aspects of energy policy, specifically in relation to gas storage.

Gas storage

27. The UK has much lower levels of gas storage capacity than other European gas-consuming countries. The Chemical Industries Association told us that whereas the UK has 13 days of storage, Germany has 99 days and France has 122 days.[50] The stark difference reflects the fact that until recently the UK has not needed significant storage levels because of the availability of gas from the North Sea. In contrast, many countries on the Continent have traditionally been much more import dependent for their gas supplies. As the UK becomes increasingly dependent on imports, the lack of storage facilities creates greater volatility in wholesale prices because supply must be balanced through imports rather than drawing down reserves.

28. Ofgem told us new investment is taking place that will potentially double the UK's storage capacity, and that there are strong incentives for companies to enter the market.[51] Other witnesses told us that the commercial incentives (price differentials between summer and winter prices) had only recently become sufficient to justify major investment.[52] However, the planning system remains a major barrier.[53] A recent example is the second refusal of planning consent for the proposed gas storage facility at Fleetwood in Lancashire, which would have added four days to the UK's existing storage capacity. We hope that the provision for National Policy Statements in the new Planning Bill, currently proceeding through Parliament, will significantly reduce the hurdle posed by the planning system in delivering new gas storage.

29. The Government has not responded quickly enough to the UK's increasing, and entirely predictable, gas import dependency by encouraging investment in storage. This is an issue our predecessor Committee raised in its 2002 and 2005 Reports on security of supply and fuel prices.[54] Significant additional storage, beyond that currently planned, is needed to reduce volatility in the wholesale gas price, which is otherwise likely to increase as the UK becomes increasingly dependent on gas imports. It is now an issue of national importance and should be a high priority in domestic energy policy.

European-UK gas price link

30. BP told us that before the opening of the Interconnector, during the mid-1990s the UK had very low gas prices and with the "development of a very competitive market", exhibited gas-on-gas competition.[55] However, since the opening of pipelines connecting the UK to the European gas market, Continental gas prices have had a much greater influence on UK prices. Figure 3 below charts the relationship between European and UK gas prices in recent years.

Figure 3: Relationship between UK gas and Continental oil-linked gas prices

Source: BP, Ev 170

31. Figure 3 shows that as the UK has become more dependent on gas imports, the European price of gas has tended to set the floor for UK prices during the summer, because higher European summer prices have led to UK suppliers selling surplus production into the Continental market, thus equalising prices. What is most striking in Figure 3 is the way in which UK prices have spiked significantly above European levels during recent winters. The data provided by BP only runs until Autumn 2006, but Figure 4, below, provided by INEOS ChlorVinyls shows a similar trend for forward prices.

Figure 4: Wholesale forward gas prices

Source: INEOS ChlorVinyls

32. This pattern was highlighted by a number of our witnesses.[56] The Minister for Energy, Malcolm Wicks told us his concern was that "two winters ago when things were relatively tight […] and when spot gas prices here were extraordinarily high, the gas should have been gushing towards us through the Interconnector and it was not. That is the thing that concerns me and I think there is still an issue".[57] The European Commission told us there may be several reasons why gas producers on the Continent are not able to take advantage of arbitrage opportunities during the winter months by selling more into the UK. These include potential infrastructure bottlenecks, and legal restrictions: for example, suppliers in France are required to hold gas in storage for a one-in-50 winter.[58] Centrica summed up the situation as follows:

    "Until there is a well-functioning competitive wholesale gas market in North West Europe, players on the continent will use the UK as a gas supplier of last resort at short notice, but may not be able or willing to provide the reciprocal service to the UK in response to price signals. In this way the UK suffers from being the gas bank for North West Europe".[59]

33. The fact that it is not possible to predict whether gas will flow into the UK in response to price signals reflects the lack of information about gas movements in EU and Norwegian markets, and levels of gas held in storage. This is in sharp contrast to the UK market, where there is a high degree of transparency. The European Commission highlighted this concern in its recent sector inquiry.[60] Ofgem told us this uncertainty increases the daily and within-day volatility of GB spot prices, increasing prices and the risk premium that customers need to pay to fix forward prices.[61]

34. The Commission is pushing for greater transparency and openness as part of its third package of legislative reforms to the European gas and electricity markets. It has the full support of Ofgem and the UK Government in this, and we welcome their involvement in the European energy regulators' initiatives to improve transparency of gas markets. We note that Ofgem is project manager for the North West region of Europe, involving sixteen transmission system operators releasing information on available capacity and gas flows. However, several witnesses noted the very slow rate of European liberalisation.[62] This was highlighted by our predecessor Committee in its Report on energy prices, three years ago, which concluded that even "on the most optimistic forecast, it is unlikely that the Continental market will be functioning as a fully liberalised one before the end of this decade".[63] With ever greater concern over security of gas supply, the prospect of a fully liberalised European gas market seems even less likely today.

35. In recent years, the European gas price has set the floor for the UK price during the summer, when the UK has been a net exporter and its gas has generally gone into boosting European winter storage levels. In winter, prices have risen markedly above European levels in order to draw gas to the UK. We are concerned that European gas suppliers are not responding to price signals more quickly during the winter months by selling into the UK. We strongly support the efforts of the European Commission both in its attempts to increase the transparency of, and to liberalise certain contractual and legal aspects of the European gas markets. Its task is particularly challenging, given countries have increasing concerns over energy security. The Government must also continue to exert strong pressure in this regard, as a political solution to this issue would do more to improve UK market conditions than any other domestic or international initiative. We consider these objectives should be a high priority for the Government in negotiations on EU policy generally, not simply within energy policy.

Oil-gas price link

36. One of the key characteristics of the European gas market is the indexing of long-term gas contracts to the price of oil, usually with a lag of 3 to 9 months.[64] This exists largely for historical reasons, but persists because the gas market in Europe is not sufficiently liquid to allow producers to use it to index long-term contracts.[65] One of the main concerns with indexation to the oil price, highlighted by the European Commission in its sector inquiry, is that wholesale gas prices cannot respond to changes in supply and demand, which is potentially damaging to security of supply.[66] The Commission did not find any trend towards a more market-based pricing mechanism for long-term gas import contracts. It concluded that creating greater liquidity in Europe's gas trading hubs would increase confidence in price formation, and help break the oil-gas price link. Because the UK's gas market is relatively well-established, there has been a move here towards contracts linked to prices on the wholesale gas market. But as European gas prices set a floor for those in the UK the oil-gas price link will continue to be a major influence on price movements in the UK market.

37. While there seems little Ofgem or the Government can do to influence the development of gas trading on European hubs, it is worth considering the role UK markets play in determining the price of oil. Crude oil is currently trading at about $140 per barrel—up more than 40% over 2008. The Chief Executive of Gazprom recently stated that prices could reach $250 per barrel in 2009.[67] This compares with a low of $10 a decade ago. There has been much debate over whether market fundamentals are driving the current increases or speculation by traders.[68] Although the oil and gas producers told us that market fundamentals will determine the price of oil in the long term, Shell also stated: "we find it difficult to rationalise all of the price movements on the basis of fundamentals alone".[69] ExxonMobil also said: "We are surprised about the prices we see today".[70] Since June 2008 US politicians have voiced concern that speculators are exploiting differences between the regulatory frameworks for energy commodity trading in the UK and US—an issue referred to as the 'London loophole'.[71] This has led to a confrontation between the two countries' financial regulators over US regulation being imposed on UK markets. On the other hand, many commentators are sceptical about claims that speculation is even in part to blame, saying that investment in oil futures is not large in relation to global trade in oil, and pointing to the absence of increasing inventories of oil which would exist if prices were too high.[72]

38. The contractual link between oil and gas prices on the Continent distorts the wholesale gas market and therefore the environment in which investment and consumption decisions are made throughout the EU. In the absence of liberalisation in the short to medium term, it seems unlikely that market liquidity will increase sufficiently on European trading hubs to provide an alternative means of indexing long-term gas contracts. The oil price will therefore continue to have a significant influence on UK gas prices. It is likely that European gas prices will continue to rise in lagged response to the current increases in oil prices, and thus will feed through to the UK market.

39. Trading on London markets plays an important role in setting the global price of oil. We fully acknowledge the important role futures markets play in helping purchasers of commodities to hedge against future price movements and so assist in planning their businesses. We also note the Treasury Committee's current interest in this subject. We consider, however, that the Financial Services Authority would be well advised to investigate the extent to which speculators within its jurisdiction are currently driving up global oil prices, and to take action if appropriate.

Gas contracting

40. The Chief Executive of INEOS ChlorVinyls told us gas suppliers on the Continent had refused to sell gas to the company on the basis of European-style long-term contracts if the company intended to ship it back to the UK via the Interconnector. Instead the company was only offered prices using the UK pricing structure, which is based on the National Balancing Point.[73] This is despite the fact that the company's operations on the Continent are able to buy gas under European-style contracts. Shell said it was "astonished" that the company had received this response, while ExxonMobil said it was "puzzled".[74] Ofgem told us it had been made aware of the issue by the company, and congratulated it for going public with its concerns.[75]

41. Clearly something is wrong with the GB wholesale gas market if INEOS ChlorVinyls, one of the UK's biggest industrial energy consumers, would rather ship gas from abroad under a European contract, than engage directly with the domestic market. Not only should Ofgem investigate why companies are behaving in this way, in conjunction with the European Commission it should also investigate the legality of gas suppliers offering widely different contract terms in different jurisdictions within the European Union. We cannot believe such behaviour is compatible with the Single Market.

42. One of our major concerns is that Ofgem's investigation is not giving more explicit attention to the wholesale gas market. In 2004/05 Ofgem conducted an inquiry into the upstream sector in response to gas price spikes that winter, but the recent price spikes have been sharper still. The focus of Ofgem's investigation this time is on the supply to households and small businesses. As part of this it will examine the relationship between retail and wholesale energy prices. However, it also needs to look again at whether the wholesale markets themselves are functioning satisfactorily.

13   Ev 183, para 2.4 (Centrica) Back

14   Ev 559 (Dominic Whittome) Back

15   Ev 459, para 91 (Ofgem) Back

16   Ev 464, para 7 (Ofgem) Back

17   Over-the-counter assets are not traded in a formal exchange. Rather, brokers negotiate directly with each other. Back

18   Ev 274, para 38 (Energywatch) and Ev 464, para 7 (Ofgem) Back

19   Q 656 (Shell) Back

20   Ev 274, para 38 and Ev 337 (Energywatch), Ev 451, para 62 (Ofgem) and Ev 184, para 2.9 (Centrica) Back

21   Ev 337 (Energywatch)  Back

22   Ev 197, para 7 (Chemical Industries Association) Back

23   Ev 465, para 14 (Ofgem) Back

24   Ev 337 (Energywatch) and Ev 559 (Dominic Whittome) Back

25   House of Commons Trade and Industry Committee, First Report of Session 2005-06, Security of gas supply, HC 632, December 2005 Back

26   Ev 408 (Major Energy Users' Council) Back

27   Ev 429 (NHS Purchasing and Supply Agency) Back

28   Ev 167, para 5 (BP) Back

29   Ev 147, para 28 (BERR) Back

30   Q 541 (Ofgem) Back

31   Ev 197, para 5 (Chemical Industries Association) and Ev 505 (Shell) Back

32   Ev 169, para 16 (BP) Back

33   The HHI is calculated by squaring the market share of each firm competing in the market, and summing the resulting numbers. Back

34   Ev 447, para 44-46 (Ofgem) Back

35   Because of the way the HHI is calculated (see footnote 33) measures for certain parts of the market can be particularly concentrated, while the overall market figure remains relatively low. Back

36   Ev 449, para 52 (Ofgem) Back

37   Q 286 (Energy Intensive Users' Group) Back

38   National Grid Back

39   Q 291 (Major Energy Users' Council) Back

40   Ev 468, para 26 (Ofgem) Back

41   Ev 399, para 3.5.1 (INEOS ChlorVinyls) and Ev 250, para 13 (Energy Intensive Users' Group) Back

42   Q 628 (BP) Back

43   Q 546 (Ofgem), Ev 371, para 5.3 (E.ON UK) and Ev 169, para 18 (BP) Back

44   Q 292 (Energy Intensive Users' Group) Back

45   Ev 469, para 29-30 (Ofgem) Back

46   Ev 250, para 14 (Energy Intensive Users' Group) Back

47   Q 543 (Ofgem) Back

48   Ev 468, para 26 (Ofgem) Back

49   Ev 393, para 3c (Growhow UK Ltd) Back

50   Q 291 (Chemical Industries Association) Back

51   Ev 452, para 68 and Ev 468, para 20 (Ofgem)  Back

52   Q 663 (BP) Back

53   Qq 298 (Chemical Industries Association) and 541 (Ofgem) Back

54   House of Commons Trade and Industry Committee, Second Report of 2001-02 Session, Security of Energy Supply, HC 364, February 2002, and Twelfth Report of Session 2004-05, Fuel Prices, HC 279, June 2005 Back

55   Q 622 (BP) Back

56   Qq 318 (Energy Intensive Users' Group) and 644 (BP); Ev 198, para 12 (Chemical Industries Association) and Ev 408 (Major Energy Users' Council) Back

57   Q 19 (Minister for Energy) Back

58   Q 905 (European Commission) Back

59   Ev 188, para 5.9 (Centrica) Back

60   European Commission, Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report), January 2007 Back

61   Ev 459, para 93 (Ofgem) Back

62   Q 627 (BP); Ev 501, para 41 (Scottish Power), Ev 408 (Major Energy Users' Council) and Ev 250, para 14 (Energy Intensive Users' Group) Back

63   House of Commons Trade and Industry Committee, Twelfth Report of Session 2004-05, Fuel Prices, HC 279, June 2005 Back

64   Ev 584 (Ofgem) Back

65   For an explanation of gas price indexation, see for example, House of Commons Trade and Industry Committee, Twelfth Report of Session 2004-05, Fuel Prices, HC 279, June 2005, page 33 Back

66   European Commission, Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report), January 2007 Back

67   Financial Times, Gazprom predicts oil will reach $250, 10 June 2008 Back

68   For example, Ev 154 (Alan Barton) Back

69   Q 617 (Shell) Back

70   Q 619 (ExxonMobil) Back

71   See for example, The Times, US watchdog wants London to tighten oil market rules, 18 June 2008 Back

72   Again, for example, see The Economist, Don't blame the speculators, July 5th 2008 Back

73   Q 291 (Chemical Industries Association/INEOS ChlorVinyls) Back

74   Qq 642 (ExxonMobil) and 648 (Shell)  Back

75   Q 563 (Ofgem) Back

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