The timing is unfortunate. Just weeks after lifting heating costs by 15 per cent for a third of the population, British Gas announces a sixfold increase in profits. But it is a vast leap to conclude therefore that BG is profiteering and that its 13 million customers are being ripped off.

The gas market is highly volatile, which means BG’s profits are lumpy. Golden patches produced by a spike down in wholesale prices can be followed by lean times when they rise. The first six months of last year were indeed a plum period for BG: operating margins ballooned to 15 per cent but in the six months before and after they were respectively 1 per cent and nil. Moreover the profit of £571 million doesn’t look so “obscene” alongside BG’s sales of more than £6 billion, and given the EU rules forcing it to invest in alternative sources of energy.

It did not really need the CBI to come to the defence of BG and its parent company, Centrica. Some CBI members, who are suffering big increases in energy bills, may wonder what the employer’s body is doing entering this debate at all.

The mood music from Ofgem has acquired a more sinister tone. Alistair Buchanan, chief executive, said last month he had “no evidence” of market failure. Yesterday he modified that to “no strong evidence”. A month ago the market was apparently working very well, according to Ofgem. Now it says only that he has “no clear evidence” that the market is failing.

Has Ofgem been leant on? There is undoubtedly pressure from Government to curb prices. Utility bills are supersensitive politically now that the average household is having to find £1,000 a year just for heat and light. Every rise tweaks inflation and delays interest rate cuts.

But the evidence may be changing, too. The price rises of the past few weeks have been more bunched than ever, while tariffs are becoming ever similar. The industry is structured in a way that hardly fosters red-in-tooth competition – with only a small number of vertically integrated players. The pricing of supplies from Europe is particularly murky. Just because UK consumers are getting as good or better a deal than the average in Europe does not mean competition is working.

There is a suspicion that Ofgem has been a little too kind to the firms it regulates. It has barely issued a reprimand or fine in years. When it has fined, the penalties have been piffling. On balance, an investigation is no bad thing. The industry is too important to consumers and business customers for there to be any question of abuse. Whether Ofgem is the right body to conduct it is another matter. An immediate reference to the Competition Commission might have been more credible – and quicker in the long run, too.

patrick.hosking@thetimes.co.uk

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