• October 9, 2015


OFT breaks cover to reveal ‘sweetheart agreement’ with price hike gas company

The Isle of Man Office of Fair Trading has broken its lengthy silence following the recent announcement by Manx Gas to perform ‘fiscal acrobatics’ by reducing gas prices and increasing standing charges. One estimate of the result of this is that 7000 households will be worse of, this at a time when energy prices have dropped like a stone globally.

Why is the IOM OFT not doing anything? The answer is because they can’t.

Apparently they are tied into a ‘sweetheart agreement’ with Manx Gas (see extract from their statement below):

“Agreement for the Regulation of the Gas Market in the Isle of Man’, following the recent publicity concerning the restructuring of charges by Manx Gas. This Agreement was signed by the Office of Fair Trading, the Treasury, the Department of Economic Development and Manx Gas Limited in April of this year.

Against a backdrop of Government actively promoting reduced bureaucracy and cost savings, the Council of Ministers authorised the OFT and the Treasury to negotiate with Manx Gas a voluntary regulatory regime for gas supplies. This was seen as the most cost effective method of regulating the gas market in the Island and led to the Agreement.”

It goes on:

“The Agreement was effective from January 1 2015 and runs for an initial period of four years. Any party to the Agreement may terminate it thereafter by giving six months’ notice in writing to the other parties. If the Agreement is successful it will continue into subsequent years.

The Agreement does preclude the OFT pursuing price investigations during the life of the Agreement. This decision was taken on the basis that a pricing investigation under the Fair Trading Act 1996 should be not be required if Manx Gas is complies with its obligations set out in the Agreement.

It is hoped that the Agreement will prove to be effective but of critical importance to stress is that there is provision for it to be terminated at any time in specified circumstances, including a material breach of the Agreement by Manx Gas.”

Given that Manx Gas is a monopoly it’s a national disgrace that an agreement as fraught with pitfalls as this was ever signed and it’s clear that far from being ‘effective’ it has exposed the most vulnerable to crippling price increases.

Manx Gas Directors and shareholders must have thought they had won the lottery when this ‘you can do what you like for four years agreement’ was signed.

The OFT make it clear the agreement can be terminated (with notice) and yet they still prevaricate. That notice should be issued with immediate effect with the added threat that on the expiry of the notice period draconian controls over this monopolistic monster will be enacted.


Issued by: The Celtic News



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