Energy minister questions British Gas’ profit margins

Energy minister Ed Davey is questioning British Gas’ pricing policy and profit margins, calling for them to go under some serious scrutiny, a news report in the local media has revealed.

In a letter to Ofgem, minister Davey argued that profit margins made by the “big six” energy firms were significantly higher than previously thought, at least as far as the gas supply business is concerned.

He demanded that the regulators should start a thorough market investigation into this matter, pointing out that British Gas had charged among the highest prices to domestic customers in the past three years.

Mr. Davey also asked the Competition and Markets Authority to consider all possible remedies to British Gas’ market dominance, “including a break-up of any companies found to have monopoly power to the detriment of the consumer”.

He also challenged regulators to “think radically”, in respect to a possible break-up of the big six, adding it was “not for a minister” to break up companies.

Ofgem, the energy market regulator, said that it was already looking into competition issues and would not say any more until that work was done, with findings set to be published at some point in March.

“Ofgem is currently working with the Competition Market Authority and Office of Fair Trading on an independent annual report looking at the state of competition in the energy market,” a spokesperson for the authority said.