U.K. TO GIVE FREE MARKET GAS SALES A TRY

Tim Eggar, U.K. Industry & Energy minister, has asked Britain's gas industry to suggest an area in which to try out gas supply under liberalized markets. Eggar and industry regulator Office of Gas Supply (Ofgas) issued proposals for introduction of competition to gas supplies and asked for suggestions for trial areas. Beginning in April 1996, government intends to give an area containing as many as 500,000 homes the chance to buy gas from independent suppliers, which are allowed to compete

Feb. 6, 1995

2 min read

Tim Eggar, U.K. Industry & Energy minister, has asked Britain's gas industry to suggest an area in which to try out gas supply under liberalized markets.

Eggar and industry regulator Office of Gas Supply (Ofgas) issued proposals for introduction of competition to gas supplies and asked for suggestions for trial areas.

Beginning in April 1996, government intends to give an area containing as many as 500,000 homes the chance to buy gas from independent suppliers, which are allowed to compete for the first time against British Gas plc for sales in the U.K. market.

One goal of the test is to evaluate price spreads caused by anticipated charges for transporting gas away from east coast gas import terminals to remote western and southern areas.

Independent suppliers said they expect to offer average savings of about 10% on current British Gas prices.

The government expects 11-12% savings in Scotland, northern England, Yorkshire, East Midlands, and East Anglia. Below average savings of 8-9% are expected in Wales, Southeast England, and Southwest England.

Deadline for responses is Feb. 24. The scheme will be extended to cover two million homes in 1997. Britain's entire 18 million home market will open to competition in 1998.