Wholesale gas prices

A wholesale gas price is the price paid by suppliers to the gas producers for the gas they supply. As the UK is heavily reliant on Europe for our gas, suppliers claim they are at the mercy of the producers who can set prices high and hold back supplies to increase demand.

So if wholesale gas prices go up, which happened between 2004 and 2006, so do our bills. If you think your supplier is charging you too much, compare them with other suppliers and see if you could save by switching.

The European Commission spent over 18 months investigating anti competitive behaviour and price charging.

In January 2007 the Commission published the results of its findings and put forward measures to ensure the European energy market was more competitive and that security of supply was guaranteed.

One of the key objectives of the 18 month European Commission energy inquiry was to rectify the current barriers to a free market by improving the transparency of the market and the formation of consistent pricing.

Wholesale gas prices started to fall in mid 2006. Ofgem the gas and electricity regulator cites that the fall is the results of a huge investment, £10 billion, is Britain’s new gas important projects have come on stream this year.

As a result suppliers have started to reverse the trend of the last three years and announcing price reductions. Although customers have welcomed these, the watchdog energywatch is calling for suppliers to pass on bigger savings to customers and give them the full benefit of the fall in wholesale gas prices.

There is hope of some relief to fuel price anxiety in a few years' time as new foreign operators race to supply the UK's gas needs.

There is also increasing pressure on the government to find alternative sources of power as our national capacity is worryingly low. In the mean time, to make a difference to your energy bill, you can find out if you are on the best tariff for you on uSwitch.com.