Oil prices increased on Tuesday…
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Ever since the promise made by Labour party leader Ed Miliband to freeze energy prices for 20 months in the event of his victory at the next general elections in 2015, energy prices have been top of the political agenda in the UK.
Following the announcement to increase prices by four of the six largest energy utilities in the UK, many MPs have made accusations that the above inflation prices are just an attempt to increase profits, just as energy consumption increases during the colder months.
Ed Davey, the Energy Minister, has now stated that the government may charge energy firms that are found guilty of manipulating the markets, with criminal sanctions.
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99% of the UK energy market is controlled by the big six energy firms (Scottish Power, British Gas, EDF Energy, EON UK, npower, and SSE), and Davey suggests that being tough with them is the only way to ensure that they don’t abuse their market dominance.
“I intend to consult on the introduction of criminal sanctions for anyone found manipulating energy markets and harming the consumer interest,” he said.
Currently energy market manipulation is just a civil offence, but by making it a criminal offence the government has enabled the option to charge the company executives for the company’s actions, even going as far as handing out jail sentences.
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Reuters claims that the ability to charge companies with criminal charges is already in effect in the financial markets.
In response to Labours bold proposal to freeze energy prices, the ruling Conservative party has said that the only way to reduce energy bills is to introduce more competition to the market. One option to improve competition is creating the ability for customers to change their energy suppliers within 24 hours, rather than waiting the five weeks that are currently needed.
Prime Minster David Cameron has recently stated that the government will set up an annual review of competition in the market.
Caroline Flinn the energy spokeswoman for Labour commented, “we don’t need another review. We need action, action to freeze people's energy bills and to fix this broken market.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com