Crunch day as Eggar steps into gas row

The Government will today step into the row between British Gas and its potential rivals . It has summoned British Gas to a crunch meeting that will include the industry watchdog, Clare Spottiswoode, following allegations in the industry that the company is dragging its heels over the introduction of domestic competition in April next year. Cedric Brown, chief executive of British Gas, may also attend in an attempt to resolve the issue.

Competitors to British Gas, including North Sea producers and electricity companies, believe that British Gas is deliberately trying to delay competition on the grounds that the arrangements needed to cope with multiple suppliers will not be in place.

The meeting has been called by Tim Eggar, the minister for energy and industry, who is determined that competition for up to 500,000 households in the South-west of England will be available from 1 April. It will then be extended to two million homes in 1997, with the market open nationally in1998.

Ms Spottiswoode, who is believed to be increasingly angered by British Gas's attitude, is also likely to oppose vociferously any slippage in the timetable. According to one industry source: ''When politics and companies get mixed, who knows what the outcome will be. This is likely to be a very important meeting."

The row primarily involves the British Gas pipeline subsidiary, Transco, whose relationship with the regulator has become strained in recent months. But Richard Giordano, British Gas chairman, has also warned that the Government's schedule for the introduction in April of competition in the domestic gas market leaves little time for a proper testing period and could "create significant risks".

British Gas blames any reticence on government delays with the legislation allowing for competition and the establishment of a network code which embodies the rules and regulations of the competitive market. A spokesman for Transco said: ''We are being pragmatic. We want more time to sort out any potential problems." Rivals say British Gas will do anything it can to keep them out of the market place.

The latest debacle coincides with the announcement yesterday by Total Gas Marketing that it will enter the domestic market next year, undercutting British Gas by an average of up to 16 per cent. Recently Amerada Hess said it would offer savings over British Gas of about 15 per cent.

Total said people paying promptly and by direct debit would see additional savings and that, overall, the minimum saving for households will be 10 per cent. The company is wooing potential customers with an initial pounds 10 payment in the form of a Marks & Spencer voucher.

There are fears in British Gas that many companies will pour into the domestic market, creaming off the most lucrative customers. British Gas's share of the industrial and commercial market - where competition is already allowed - has plummeted to about 35 per cent.

The spectre of domestic competition is just one of the problems that have plunged British Gas into turmoil over the last year. The company is struggling to recover from a series of public relations fiascos and boardroom upheavals. It also faces severe difficulties over costly long- term "take or pay" contracts with North Sea producers, which force the company to buy more gas than it can sell. The availability of cheap spot market gas allows rivals to undercut the company and there have been warnings that domestic competition will make the situation worse.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific