A trade and industry committee, which will be led by Labour MP Martin O'Neill, is to launch an inquiry which will examine why industrial energy users are facing rises in energy costs higher than European competitors.

A number of paper producers have highlighted rising energy costs as contributing to planned price increases.

CPI's head of environment David Gillett welcomed the inquiry, and said the rise in energy prices could not be justified simply by the increase in oil prices.

Gillett said that the CPI, and the Energy Intensive Users Group, had continually sought government meetings to discuss this issue.

"Like other industrial energy users, we are still waiting to hear the final outcome from the Financial Services Report into trading practices," said Gillett.

This would be eagerly awaited, along with the second stage of the OFGEM inquiry into gas prices, which was extended earlier this year to cover 2004-2005, he said.

"The trade and industry inquiry can only help us to find the answers," said Gillett.

Story by Andy Scott