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Last Updated: Monday, 14 January 2008, 07:23 GMT
Regulator rules out energy probe
Gas rings
After Npower's price increases, rivals are tipped to follow suit.
Energy regulator Ofgem has said it has no concerns about anti-competitive behaviour in the UK, despite consumers bracing themselves for rising bills.

There are no plans to refer gas and electricity providers to competition authorities, Ofgem said.

A Sunday Times/YouGov survey found that 89% of customers felt they were being ripped off by energy firms.

Chancellor Alistair Darling is to meet Ofgem to review the reasons behind the price rises and their implications.

We keep markets under constant review

Earlier this month, Npower increased average gas prices by 17.2% and electricity by 12.7%, and its rivals are expected to follow suit.

The company, the UK's fourth-largest energy supplier, blamed the price rises on soaring wholesale costs.

'Competitive market'

Independent watchdog Energywatch has called on the UK's "big six" energy firms - British Gas, Npower, EDF Energy, E.On, Scottish Power and Scottish and Southern Energy - to be referred to the Competition Commission.

But an Ofgem spokesman said that Britain had "one of the most competitive energy markets in Europe, with changing market share between the companies, price differences and good levels of switching".

He added: "We keep markets under constant review but we can only take action if we find evidence of anti-competitive behaviour."

Npower, which has four million UK customers, said wholesale energy prices had risen by 66% for electricity and 60% for gas since last year.

Analysts say wholesale gas prices have risen on the back of the record cost of oil, as any increase in the price of crude has a knock-on effect on gas.

Gas accounts for 40% of electricity production in the UK.

The growing number of energy firms on the continent turning to the more liberalised UK market for cheaper supplies is also thought to have driven UK wholesale gas prices higher.

However, energy firms have been criticised for not passing on lower costs to customers when the wholesale price was cheaper.

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