UK exports gas at a lower price than it pays for imports, according to the Guardian

According to the newspaper's report on over 40% of days between December 2011 and October 2012, gas was being exported to continental Europe when it would have fetched a higher price in the UK. Over the same period, the UK exported 15 times more gas through the 'interconnector' pipe linking it with Belgium than it imported.

The UK imported large volumes of gas from Qatar over the same time period despite it being up to 5% more expensive than gas exported to the continent, the Guardian said. It took the import figures from monthly government data published by HM Revenue and Customs.

The Guardian suggested that the figures could show that household energy bills were higher than they would have been if domestically produced gas had been used here, particularly as exports were highest in the coldest months. Between December 2011 and February 2012, there were 'flows against price difference' (FAPD) on three out of four days, it said.

FAPD have become an increasing problem since 2004, when the UK switched from being a net gas exporter to a gas importer. In that time period, additional pipelines have been opened with Norway and the Netherlands and terminals for shipped liquefied natural gas have opened.

Energy regulator Ofgem began an investigation of FAPD in October 2012, publishing a call for evidence alongside Belgian and Dutch regulators. According to its initial analysis, FAPD "undermine" the role international pipelines play in relation to national security of supply as they "may result in additional gas being exported from a market facing a shortage".

"It is vital that gas on these links flows in line with market signals, to ensure security of supply for customers," Ofgem said in an open letter published alongside the call for evidence in October. "However, initial analysis suggests the links are not always being used efficiently. On behalf of consumers, we are looking at all the evidence to establish the facts."

The regulator has started a "high level" investigation of the possible causes of potential inefficiency, it said in its October letter. It said that there would likely be a "range of factors" responsible, relating to both market arrangements at each end of the interconnector pipelines and the arrangements on the interconnectors themselves.

"It may even be that some level of inefficiency is inherent in cross-border trading and that deeper regional integration or harmonisation of market arrangements between the three markets is required," Ofgem said.

"Insufficient liquidity or a lack of transparency may mean that shippers do not face stable and robust price signals to enable them to take efficient trading decisions. We consider day-ahead price signals in all three markets to be sufficiently robust to enable shippers to trade, but there remains a question around within-day price signals," it said.

However, even at this early stage in its investigation the regulator noted that "balancing arrangements" in Belgium and the Netherlands "provide incentives" for shippers to ensure that imports and exports were evenly balanced throughout the day.