Darling seeks energy price meeting

In a sign of concern about the impact on the economy of double-digit hikes in bills, Mr Darling indicated he is conscious of the link between energy prices and macro-economic stability.

Energy supplier Npower last week sparked anger among customers when it announced hikes of 17.2% for gas and 12.7% for electricity, increasing typical bills by £95 for gas and £64 for electricity and taking the average dual power bill to more than £1,000 a year.

The announcement, coming against the backdrop of oil trading at more than 100 US dollars a barrel, raised concerns that other power companies may follow suit, with a knock-on effect on the British economy.

In a letter to Ofgem chairman Sir John Mogg and chief executive Alistair Buchanan, obtained by The Times, Mr Darling asked for a meeting soon to discuss the implications of the price rises.

And he appeared to suggest he wants to explore claims from some experts that the energy companies do not need to pass on commodity price increases to consumers at once.

Mr Darling wrote: "I would be interested in receiving your assessment of gas and electricity supply and market conditions both in the UK and Europe and likely future trends.

"I would be particularly interested in your views on the relationship between wholesale price movements and feed-through to domestic retail prices and the likely availability of gas supplies from the Continent, including Norway, for the remainder of the winter and 2008."

Karl Brookes, spokesman for consumer watchdog Energywatch, said: "Energywatch is not convinced the market is working in the best interests of consumers and we are pleased this review is taking place.

"If you believe we are in a fully-fledged competitive market you would expect suppliers to respond in a more innovative way than instantly responding to wholesale prices by hitting the consumer in the pocket."