UK: James McKinnon and gas - an explosive combination.

UK: James McKinnon and gas - an explosive combination. - There has always seemed more to their conflict than meets the eye. But just what motivates James McKinnon, director general of Ofgas (Office of Gas Supply), in his constant harrying of British Gas

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Last Updated: 31 Aug 2010

There has always seemed more to their conflict than meets the eye. But just what motivates James McKinnon, director general of Ofgas (Office of Gas Supply), in his constant harrying of British Gas has remained a secret, until now. The fact is that the doughty Scot has a phobia about the stuff. To put it mildly, he is terrified of all things gaseous.

Sadly for British Gas chairman Bob Evans, McKinnon's fear does not extend to the company and its pricing policies. His proposed changes to the tariff formula for domestic customers (which accounts for 60 to 70% of British Gas profits) should be made public this month.

At present the company can pass on supply costs to customers at the rate of two percentage points below the retail prices index. McKinnon is expected to change the rate to RPI minus four. At the same time he is likely to reduce the company's ability to pass on 100% of its gas purchasing costs to customers.

There may be light at the end of the tunnel for Evans and his colleagues, however. McKinnon tells us that having dealt with one monolithic supplier he would dearly love to get his hands on another, namely British Rail. Evans and company would happily provide a reference.

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