Minister to intervene in pounds 700m gas row
Wednesday 25 October 1995
The Government has pledged support for British Gas's efforts to renegotiate long-term contracts with North Sea producers, which are forcing the company to buy more gas than it can sell. Tim Eggar, Minister for Energy and Industry, said he could not take a direct role but would act as "moderator or facilitator" if asked, or "if I thought matters were getting out of hand".
Mr Eggar's statement at a seminar in London marks a significant change in his public stance on the contracts, which until now the Government has said were a matter for the industry. It comes amid mounting commercial pressure on British Gas, which by the end of this year will have been forced to buy about pounds 700m worth of gas which it cannot yet sell. Some City analysts believe that the figure will soar well beyond pounds 1bn within a few years.
Mr Eggar said that the introduction of competition has "changed the underlying basis of these contracts", which were entered into when British Gas was a monopoly buyer and seller of gas throughout the UK. He said that extending competition to domestic customers, beginning next year, would put further pressure on the company.
"British Gas can no longer assume all the market risks of selling gas. In the industrial and commercial market, BG's share has fallen from virtually 100 per cent in 1990 to around 35 per cent today," he said.
Mr Eggar said that failure to renegotiate the contracts, which is being strongly resisted by some large producers, could have "wider implications for the the development of the UK continental shelf".
The company was further embarrassed yesterday by a survey which underlined its lack of popularity and showed that its public believes it gives poor value for money.
The Mintel survey showed that, in the eyes of consumers, British Gas lags behind other household names in value for money and trustworthiness. It also falls behind in terms of being in touch with customers.
Mintel International said that the 1995 survey coincided with two negative news items for British Gas: the impending pay increase to Cedric Brown and the decision to allow discounts to direct-debit customers.
Boots, the high-street chemists, came top in four of the five categories. The only one it failed to win was the social and environmental awareness poll, topped by Body Shop.
Comment, page 21
- 1 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 2 Ben Affleck asked TV chiefs to hide slave-owning ancestry, new hacked Sony emails published by Wikileaks claim
- 3 Driving while dehydrated can be just as dangerous as drink driving, study suggests
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
- 5 One Direction: Louis Tomlinson launching his own record label, has already 'signed two acts'
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Driving while dehydrated can be just as dangerous as drink driving, study suggests
Ben Affleck asked TV chiefs to hide slave-owning ancestry, new hacked Sony emails published by Wikileaks claim
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...