Ofgas likely to phase in suppliers

Ofgas, the Gas industry watchdog, yesterday gave its clearest signal yet that it would phase in the move towards full competition for domestic customers, instead of throwing the market open in one move in the spring of 1998.

The news raised the possibility of delays for some of the more than 16 million affected households, which might not be able to shop around for alternative gas supplies to British Gas until the end of 1998 at least.

"When you come to look at nationwide competition you can't do it overnight. You'll have to phase it in then," said an Ofgas spokesman.

"One of the things we're looking at is phasing it over a period of time. It doesn't make sense to do it in one big bang," he said.

The spokesman said a timetable had not been decided. However, independent gas suppliers who compete with British Gas suggested full-scale competition might start at the beginning of 1998 and continue for several months.

Mark Petterson, the managing director of Total Gas Marketing, a joint venture between the French oil giant and London Electricity, said: "We've got to look to the right solution, if TransCo can't cope for 16 million people potentially switching from British Gas in one day. Nobody is looking for a delay apart from British Gas."

The news increases the pressure on the electricity industry to adopt a similar, phased approach to domestic competition for power supplies, planned to take place in one go in April 1998.

Ofgas yesterday confirmed that it was to roll out the second stage of its ongoing competition trial by extending choice to 1.5 million additional homes earlier than the industry had expected.

More than 500,000 households in Dorset and the former county of Avon will be able to choose their supplier from 13 January, with up to a further 1 million customers in Kent and East and West Sussex added on 7 February. The process had been expected to happen in April 1997.

In the first trial area, in the South-west, 500,000 homes have had a choice of gas company for more than four months. So far about 70,000 have switched from British Gas.

The decision to phase in the second stage of competition was welcomed by the Gas Consumers' Council yesterday. Some customers in the South- west had complained after British Gas accidentally debited hundreds of pounds from their bank accounts when they switched to alternative companies.