Could gas prices have been rigged?

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Could gas prices have been rigged?
Could gas prices have been rigged? Photo:

Another market, another investigation. Tonight the Energy regulator and the City watchdog have both begun initial investigations into allegations that traders tried to fix the price of gas.

After allegations emerged from The Guardian early this evening, Jason Torquata, a former energy 'price reporter' contacted ITV News to explain what he claims happened.

He explained he used to monitor energy prices for the 'Heren' index, a weighted average of what traders pay for gas that is used by energy companies to set their prices. It therefore really matters to the rest of us too. Jason told me that traders sometimes attempted to manipulate the price, particularly towards the end of the trading day as markets were about to close.

The authorities were told of these concerns on Friday by another whistleblower, Seth Freedman, and while the investigations are at the stage of allegations, not concrete evidence of a widespread problem, the Government is taking it seriously enough for the Energy Secretary to have promised a statement in the Commons tomorrow. In the wake of the Libor scandal, international regulators are already looking at prices like this that are used as benchmarks.

Both industry and regulators seem tonight unsure of where these claims may lead. But with relations between government and the energy sector already frayed, the allegations could exacerbate an already tense situation.