Ofgas failed poorest customers, say MPs

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The Independent Online
The gas industry regulator was criticised yesterday by a cross- party committee of MPs for failing to protect the interests of the poorest customers as the domestic market is opened to competition.

In a hard-hitting report, the Commons Trade and Industry Select Committee also urged Ofgas not to press ahead regardless with the existing timetable for opening up the market, warning that it could pose major risks.

The MPs said that socially disadvantaged customers paying by pre-payment meters had benefited least from competition and expressed concern that Ofgas had failed to tackle this issue until May of this year, more than 12 months after the market began to be liberalised.

The report urged Ofgas to introduce measures that allow pre-payment customers to share in the "full benefits resulting from competition" before the next tranche of competition begins next month among 2.8 million households in Yorkshire and the North-west.

After intervention by Ofgas, Centrica, the old trading arm of British Gas, agreed to offer increased discounts to pre-payment customers. But they are still below the level for direct debit customers, while the discrepancies are even greater on tariffs offered by some independent gas suppliers.

The roll-out of competition nationwide is due to be completed in May when 3.2 million customers in London and Surrey get the chance to shop around.

The MPs also call for a new regulatory mechanism to mirror the emergence of suppliers offering both gas and electricity under so-called dual fuel deals. Ofgas and the electricity regulator, Offer, are due to publish new guidelines in this area.

- Michael Harrison