Chancellor Alistair Darling has called for a meeting with energy regulator Ofgem to discuss last week's hike in gas and electricity bills by Npower.

Darling is said to be unconvinced by Npower's arguments that they are only passing on the increases in wholesale prices.

According to the power firm wholesale energy prices have risen by 66% for electricity and 60% for gas since last year.

In response Npower have increased average gas prices by 17.2% and electricity by 12.7%, rivals are expected to follow suit.


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

It appears he wants to explore claims from some experts that the energy companies do not need to pass on commodity price increases to consumers straight away.

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."

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."

Gas accounts for 40% of electricity production in the UK.

(GK/JM)