More manipulation? Claims electricity market also rigged

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Electricity markets
A general view of Electricity Pylons at sunset near Denny, Falkirk. Photo: Andrew Milligan/PA Archive

Just how widespread is market manipulation? The FSA and Ofgem confirmed last night they are both investigating claims, like those made on last night's News at 10, that wholesale gas prices are being manipulated in an attempt to rig an important index that energy companies use to set their prices.

But ITV News has been told that the electricity market may have been rigged too.

Omar Rahim, a former energy trader who used to deal for UK and European utility companies told me "it's being going on for years" and claims that the "electricity market is worse" than what has been going on in the gas market.

It's easier to fiddle he claims, because there are fewer traders in the electricity market, 50 or so at any time, whereas in the gas market there could be as many as 200.

He said: "Having traded the market...I know it has gone on for years," claiming that the lack of regulation means it is "very easy" to push prices one way or the other.

He believes slack rules make it far too easy for the markets to be wrongly manipulated, saying that Ofgem has been "powerless".

He hopes this will be the moment that the energy market is sorted out for good. New European rules are already on the way that will tighten things up, but in Rahim's opinion the UK regulators have been far too slow to act.