Should bubbles be forming only in center of pot when simmering? (Dutch oven on gas burner)
The reason is almost certainly, as you suspected, because the flame is small.  Neither the ceramic coating nor the cast iron body of a Le Creuset dutch oven are going to conduct the heat around the pot very much; it will go into the food basically right above the flame.

The temperature differential in the pot from right over the flame to at the perimeter is doing neither the quality nor safety of your sauce any good.

You want the entire contents of the dutch oven at a safe temperature (at least 140 F, 60 C) as it stews, simmers, braises, or whatever.  It sounds like this is certainly not true for you right now.

I find the best way to do this sort of cookery is not to use the cook top (hob), but rather place the Dutch oven in a slow oven (about 300 F, 150 C).  This will envelope the entire pot with heat, and transmit to the food inside all around.  It will cook more evenly, without much risk of burning, and is very low maintenance.