Minister says he could break up British Gas

Post by Jeff Stevens on 11th February 2014 in General industry

Minister says he could break up British Gas

The government's energy minister has said that the UK's biggest domestic gas supplier, British Gas, could be broken up in an effort to limit its profit margins.

Ed Davey has made his announcement as the subject of high gas prices continues to feature high on the political agenda.

In a letter to the gas market regulator Ofgem, Davey wrote: "There is evidence that British Gas has tended to charge one of the highest prices over the past three years, and has been on average the most profitable."

He said the government was therefore considering how it could create a more competitive market, which might include "a break-up of any companies found to have monopoly power to the detriment of the customer".

British Gas maintains that it needs to retain its profit margin to enable it to invest in its supply network.

The figures on which Davey based his call came from energy regulator Ofgem, and showed that gas profits at some of Britain's biggest suppliers are more than five times higher than profits from electricity, Reuters news agency reported.

A major investigation is currently under way into the workings of the retail energy market in the UK, involving Ofgem and competition authorities.

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