Ofgem Warns Gas Companies to Pass on Wholesale Price Drops to Customers

Alistair Buchanan, chief executive of Britain's energy regulator Ofgem, has urged gas companies to pass on the recent drop in wholesale prices to customers. This warning comes as Powergen, the country's second-largest power firm, imposed a significant price hike on its six million customers. Buchanan expressed optimism that the UK will have an adequate gas supply by early next year, citing improvements in supply chain, new pipelines, and the refilling of the Rough storage facility.

Key Takeaways:

• Ofgem has warned gas companies that they will be investigated if they fail to pass on a fall in wholesale prices to customers.
• Wholesale gas prices have dropped for four consecutive days, with the current price at 69p per thermal unit, higher than last winter's average of 67p.
• Ofgem's Alistair Buchanan expects the price to drop to 61.70p by the end of next year, according to futures market predictions.
• A new terminal operated by Excelerate Energy could meet 3% of peak demand starting in December, alleviating concerns about winter price spikes.
• New pipeline capacity to Norway and continental Europe is on track, as well as the refilling of the Rough storage facility, which will further ease supply concerns.

Statistics:

• Wholesale gas prices have dropped for four consecutive days.
• Current wholesale gas price: 69p per thermal unit.
• Last winter's average wholesale gas price: 67p per thermal unit.
• Projected wholesale gas price by the end of next year: 61.70p per thermal unit.
• Capacity of Excelerate Energy's new terminal: 3% of peak demand starting in December.
• Rough storage facility's refilling status: on track.

Sources:

• The Mail on Sunday
• Ofgem website (no specific source cited), but Ofgem chief Alistair Buchanan mentioned as a direct statement