FSA examines whistleblower's claims of 'Libor-like' manipulation in gas prices [View all]
Source: The Guardian
The City watchdog, the Financial Services Authority, is investigating claims by a whistleblower that Britain's £300bn wholesale gas market has been "regularly" manipulated by some of the big power companies, exploiting weaknesses that echo the recent Libor scandal.
Separately, the energy regulator Ofgem has been warned by a company responsible for setting so-called benchmark prices, ICIS Heren, that it had seen evidence of suspect trading on 28 September, a key date as it marks the end of the gas financial year and can have an important influence on future prices.
The whistleblower, who worked for ICIS Heren, raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company. These benchmark prices are critically important because many wholesale gas contracts are based on them and small changes in the price can cost or save companies millions.
The revelations come at a highly charged time for Britain's energy sector, with many of the big six suppliers under public fire for alleged profiteering on household energy bills and mis-selling on the doorstep.