UK: British Gas MONOPOLY TO BE BROKEN.

UK: British Gas MONOPOLY TO BE BROKEN. - The Office of Fair Trading is clearly upset that the British Gas monopoly is still unbroken - but elsewhere optimism is high that the end is near.

by
Last Updated: 31 Aug 2010

The Office of Fair Trading is clearly upset that the British Gas monopoly is still unbroken - but elsewhere optimism is high that the end is near.

Kleinwort Benson analyst Paul Spedding points out that nearly 40% of new gas supplies since 1989 have been committed to the growing pool of fledgling British Gas competitors.

As it takes four or five years to get a new gas field flowing, by 1993 new players like Amerada Hess, BP, Shell/Esso, AGAS and Enron will be emerging as a force. Meanwhile, it is likely that British Gas will again be asked to on-sell some of its supplies to competitors in 1992-93.

Getting their hands on the gas is the newcomers' biggest problem - but reports that they have now tied up near 20% of total committed supplies suggests an easier run ahead. In the new market of gas-fired power stations they have already scored a good half share. Even Amerada Hess marketing manager Caroline Harper says that radical political options such as breaking up British Gas or hiving off the pipeline system, would be over-reactions. The pipeline owner would still be a monopoly.

Harper and Gordon Edwards, Midlands Gas business manager, are both delighted that British Gas's legal grip on smaller industrial customers should end. But all moves are on hold.

British Gas is one hot potato the Government won't touch until after the election.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today