Unit 3: Gas Prices - Is there 'real' competition?

Thank you to Riz for finding this excellent article on gas prices in the UK.

It raises many important issues for Unit 3 students.

For instance, the big six do face competition from many smaller firms, but it suggests that they are not really effecting the market enough to change behaviour.

Also, the gas industry say they cannot pass on the recent price falls due to the fact they 'hedge' bu buying gas at a 'futures' price rather than the current market price.

Whether this is true and to what extent it effects gas prices for the customer is the regulators role to find out. But it highlights the complex issue of gas pricing and asymmetric information.