Chancellor seeks answers over fuel price rises

By Rich Bowden, M&C Staff Writer Jan 7, 2008, 11:30 GMT

(FILE) A file photo of Chancelor of the Exchequer Alistair Darling at the Treasury for his first day on the job in London, 28 June 2007. EPA/ANDY RAIN

(M&C) - Chancellor Alistair Darling has called a meeting with energy regulator Ofgem to seek reasons for recent hikes in fuel prices.

Last week energy supplier Npower announced it would increase its prices by 17.2% for gas and 12.7% for electricity. The rise effectively increases the average gas/electricity power bill to more than £1,000 a year with typical bills raised by £95 for gas and £64 for electricity.

In correspondence to the Ofgem chairman Sir John Mogg and chief executive Alistair Buchanan and quoted by The Times, Mr Darling says: "I would be interested in receiving your assessment of gas and electricity supply and market conditions both in the UK and Europe and likely future trends.

"I would be particularly interested in your views on the relationship between wholesale price movements and feed-through to domestic retail prices and the likely availability of gas supplies from the Continent, including Norway, for the remainder of the winter and 2008."

Karl Brookes, spokesman for consumer watchdog Energywatch said his organisation was, "...not convinced the market is working in the best interests of consumers and we are pleased this review is taking place."

"If you believe we are in a fully-fledged competitive market you would expect suppliers to respond in a more innovative way than instantly responding to wholesale prices by hitting the consumer in the pocket," he added.