Supplier puts pressure on British Gas

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The Independent Online

Industrial Correspondent

United Gas, a big independent gas supplier, has called for British Gas pipelines to be hived off as a separate subsidiary. The company, whose views are widely supported in the industry, said it was a "make or break issue" for the future of the competitive market in the UK.

Alan Duncan, a Conservative backbencher, has tabled an amendment to the Gas Bill - now in committee stage- proposing that gas transportation companies should not also be allowed to supply gas to customers. Mr Duncan's amendment does allow for gas transporters to be a separate subsidiary of a gas supply group.

Utilicorp and other gas suppliers that use British Gas pipes fear that without completeseparation of the pipelines they will be at a disadvantage to the gas supply arm of British Gas.

Roger Turner, managing director of United Gas, said the Government had placed the UK gas pipeline in the custodianship of British Gas when it was privatised. "With any change of the company's ownership in future, it is critically important that the regulator, Ofgas, has the ability to protect the consumer interest." For this, ring-fencing the pipes business was necessary.

British Gas has already agreed to provide separate accounts for the pipes business, Transco, and vehemently opposes further separation.A spokesman said:"It would amount to unnecessary and undesirable disruption for Transco at a time when the domestic market is being opened to competition."

A spokesman for Ofgas said it was happy with the accounting arrangements for Transco but the matter was being kept under review.