MPs demand answers as gas bills soar

AN INQUIRY will be launched by MPs next month as gas consumers face soaring bills. Customers have been hit by a 45% surge in prices this year.

The powerful Trade & Industry Select Committee is seeking information from the EU trade and energy commissioners to explain why people on the Continent pay less for their power supplies, Financial Mail on Sunday has revealed.

The inquiry also reflects unease among some MPs that the energy market may not functioning properly.

But committee chairman Martin O'Neill said: 'I don't share the view that the market is being manipulated. It is a very complex problem and it has to be investigated thoroughly. It could be that the market is not working properly on the Continent.'

Even though the UK still has the benefit of relatively cheap North Sea gas, energy prices are up to 30% higher than on the Continent.

Millions of gas and electricity customers have been forced to pay an extra £100 a year, following the decision by British Gas, Scottish Power and npower to push up prices.

In the next month, other power providers are expected to raise their prices by up to 11%.

The decision by MPs to investigate the huge jump in energy prices was welcomed by consumer groups and the industry.

Jeremy Nicholson, director of the Energy Intensive Users' Group, said: 'This is good news. I hope Martin O'Neill will investigate what is happening in the energy market. There is plentiful supply and not a huge demand, so it is difficult to see why prices are cheaper on the Continent.'

Allan Asher, chief executive of consumer watchdog Energywatch, said: 'It is very clear we need a thorough investigation of the wholesale gas market if the causes of upward price movements are to be understood and remedies identified.'

Gas and electricity regulator Ofgem, investigating the reason for the price increases, is expected to report this week.

The Financial Services Authority has also been called in to help.

The intervention of the FSA, the main City regulator is regarded as highly unusual and suggests that individual trades might be under investigation.

Any company found guilty of fixing the market could face a fine of up to 10% of its UK turnover.

Suggestions that North Sea oil and gas producers have manipulated the market are strongly rejected by the industry.