Gas price reporting methods used by industry media flawed, say traders

The reporting method used by industry media in the British gas market to assess daily prices — which are at the centre of a regulatory probe — is flawed and easy to manipulate, some traders in the sector say.

The Financial Services Authority and energy regulator Ofgem are investigating allegations by a whistleblower that traders have manipulated wholesale prices on Europe’s biggest gas market, a trend-setter across the continent.

Although the example highlighted in the probe relates to the benchmark price on a certain day being lowered and not raised, the issue is a political tinderbox in Britain, where five of the six dominant energy distributors increased retail energy bills for this winter.