Steadily increasing energy prices have been a concern of property owners for some years, so news that the UK has been exporting gas for less than it imports it, will not go down well – particularly when it may well mean consumers are paying more as a result.
A recent analysis conducted by the Guardian and Greenpeace suggest that the UK has been exporting home-sourced gas 5% cheaper than it has been importing it – from Qatar.
Ofgem, the body that oversees the UK’s gas and electricity markets, believes the practice undermines security of supply, since it results in “gas being exported from a market facing a shortage”.
The government has stated that un-optimised flow of gas between the UK and the continent leads to “imperfect price formation”, which could be inflating customer bills.
The Department of Energy and Climate Change says it has been working with EU nations to make gas trading easier, and to promote “more effective price formation, and bring price and energy security benefits for UK gas consumers”.
The phenomenon of exporting gas more cheaply than the price it is imported for is termed “flows against price difference”, or FAPD, within the industry.
Commenting on the findings, Greenpeace’s Leila Dean said, “the gas market has once again been revealed as a dark and murky world.”
Many of our landlord and holiday home insurance customers will be keen to see if Ofgem can pinpoint why such practices exist, and work towards bringing gas prices down for UK households and landlords.
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