Energy group fined millions for manipulating UK gas prices
An energy group has been fined millions of pounds for manipulating UK gas prices.
Engie Global Markets, a France-based energy firm with ties to the UK, is now £2.1m worse off after Ofgem discovered it was behaving inappropriately.
The Mail reports that the watchdog's investigation found Engie Global Markets was involved in a form of market manipulation called 'spoofing', which involves placing bids or offers to trade with no actual intention of completing them in order to increase or decrease prices.
The 'spoofing' occurred from June to August 2016 and involved a number of bids and offers to trade concerning a natural gas contract on the UK wholesale gas market.
Ofgem said this broke market manipulation rules and added the provider, which rebranded from GDF Suez in 2015, 'failed to take appropriate measures' to prevent the breach from happening or detect it.
Dermot Nolan, chief executive at Ofgem, said: 'This investigation demonstrates Ofgem's commitment to monitoring wholesale energy markets in Great Britain and ensuring their integrity on behalf of consumers.
'Ofgem's enforcement action under REMIT sends a strong signal to all energy market participants that we have the powers to tackle market manipulation wherever we find it - and are ready to use them.'
The watchdog launched an investigation after it was tipped off about suspicious activity on the British wholesale gas market in November 2016.
However, despite the breach of REMIT - energy market integrity and transparency legislation - the investigation found no evidence of more widespread market manipulation by Engie.
Ofgem said the provider, who supplies just under 100,000 households, co-operated with investigations and has now taken measures to prevent this type of price manipulation from happening again.
It granted Engie a 30 per cent discount for an early settlement – reducing the fine from an initial £3million.
A spokesperson for Engie said: 'EGM operates with the highest standards of risk control, ethics and compliance, and therefore strongly condemns practices that distort the market.
'The company immediately undertook measures to ensure that such practices are detected and not repeated again by reinforcing the implementation of its existing supervising tools which guarantee a constant and rigorous follow-up and audit of energy trading activities.'
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