Written question asked by George Osborne (Conservative) on Monday, 24 January 2005, in the House of Commons. It was due for an answer on Tuesday, 1 February 2005. It was answered by Mike O'Brien (Labour) on Tuesday, 1 February 2005 on behalf of the Department of Trade and Industry.

Dept of Trade and Industry

Question: To ask the Secretary of State for Trade and Industry, what assessment she has made of the operation of the UK forward wholesale gas market; what assessment her Department has made of the differential between the UK forward gas price and comparable prices in the rest of the EU; and if she will make a statement on the effect of the UK forward wholesale gas market on the competitiveness of intensive industrial consumers of gas.

Answer: Mr. George Osborne: To ask the Secretary of State for Trade and Industry what assessment she has made of the operation of the UK forward wholesale gas market; what assessment her Department has made of the differential between the UK forward gas price and comparable prices in the rest of the EU; and if she will make a statement on the effect of the UK forward wholesale gas market on the competitiveness of intensive industrial consumers of gas. [211249] Mr. Mike O'Brien: Great Britain has the most highly developed forward gas market in the European Union. UK forward prices for contracts delivering gas in Quarter 1 2005 and winter 2005-06 rose slowly through 2004, peaking sharply in October, before falling back. Continental forward prices (Zeebrugge Hub, Belgium, and TTF, the Netherlands) followed a similar pattern, but did not peak as severely and remain below the UK price. The relatively high UK winter forward prices reflect seasonality and the potential tightness in the market. My right hon, Friend the Secretary of State met representatives of energy intensive users before Christmas and agreed that officials would work with industry to develop ideas for improving the operation of the forward gas market. I have also held discussions with companies on this issue.

Secondary information