Gas giants face collusion inquiry

Two of Europe's largest energy companies are facing European Commission allegations of collusion.

E.On, of Germany, and Gaz de France have been asked to answer charges that they shared European markets out between them when importing Russian gas through a pipeline they jointly own.

European Commission officials believe the alleged collusion may have enabled the two companies to have kept the price of gas at artificially high levels.

If charges of collusion are proved, the two companies could be fined up to 10 per cent of their annual global turnover for each year in which offences were committed.

The investigation centres on the Megal pipeline, which carries gas from Russia across central and eastern Europe, through Germany to France. The pipeline is the main source of gas for German consumers, who would therefore have been the main victims of any collusion.

Around 40 per cent of European gas now comes from Russia, but competition authorities have repeatedly claimed that prices are too high because of the control that a few large companies maintain over the distribution networks.

The price of wholesale gas hit a record high earlier this week, prompting warnings that gas bills in the UK could rise by 40 per cent or more this winter. Consumer groups in this country have made similar complaints about competition concerns.

Gaz de France is already facing a separate European Commission investigation into whether it restricted imports of gas into France, in order to maintain prices and limit competition.