Gar Prices v Wholesale prices

colinw

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/4613336/Gas-bills-nearly-doubled-in-three-years-despite-wholesale-prices-being-lower.html

How are these energy companies getting away with this. Is no-one regulating these companys. It seems like they can all charge what they want. :mad:

1carminestocky

OFGEM are the regulator so, basically, no-one IS regulating them. Prepare to be accused of uninformed ranting by the usual suspects on here. And the Telegraph's integrity as a newspaper will also very probably be questioned. Stuffed to the gills with energy industry workers in here...

icefall

I know - watch the government carry on turning a blind eye likes it has done for years now. If you are a chief exec making money you might as well print your own money machine.

TonyYorkshireman

I don't begrudge any company making money, that's the essence of business but what annoys me more than anything is the fact they make such INCREDIBLE profits!

I wait with baited breath at this years huge profit anouncements from the big 6 cartels...sorry companies.

T.

jimexbox

1carminestocky wrote: »

OFGEM are the regulator so, basically, no-one IS regulating them. Prepare to be accused of uninformed ranting by the usual suspects on here. And the Telegraph's integrity as a newspaper will also very probably be questioned. Stuffed to the gills with energy industry workers in here...

Im pretty cynical, with good reason I believe as Ive been around the block long enough to realise how a capitalist business model works. Basically you screw your customers for all you can get away with. With a toothless regulator who regulates paperclips from what I can see, we are in the positon we are now. Like you surmised, the utility companies do what they like.

It is the perfect business, recession? Who cares. Cold winter? Fantastic. War in the Middle east? *rubs hands* Oil pipeline blown up? A lazy lob-on. And no its not a rant, just my opinion.

storminbalder

TonyYorkshireman wrote: »

I don't begrudge any company making money, that's the essence of business but what annoys me more than anything is the fact they make such INCREDIBLE profits!

I wait with baited breath at this years huge profit anouncements from the big 6 cartels...sorry companies.

T.

No. Only 1 cartel. With 6 members.

Vestra

When are the profits of the big 6 announced?

SwanJon

You can find last years on Centrica & SSE's websites and add a year - soon I think.
You might find it more difficult with the companies listed in Spain, France & Germany.

savers_united

When prices are fluctuating these big 6 will always be able to cover their tracks and justify their prices with we bought 6 months ago when wholesale prices were X per Therm.
However when and we will see a prolonged fall in wholesale Gas prices then there will be nowhere to turn and say but we bought when prices were X.
Everyone will know that wholesale prices have been low for 12mths and no matter when bought will be at the lower rate.

At the moment future summer 09 prices are around 40p / Therm, to give some idea this kind of price was last seen during summer 07 when prices where 30-40% cheaper to the retail customer.
Winter 09 futures are approx 15% higher than winter 07 prices at the moment but I am sure this will drop by the summer and see futures for winter 09 falling to winter 07 prices.
I really do think that if that happens and these big 6 do not pass on at least 30% falls to retail customers then the government must take action or people will show their anger, until now I think the rises have been accepted because of record oil prices and the energy companies saying they buy in advance.
Next winter will be a different story, all graphs are pointing downwards where as this time last year they were pointing upwards.

TonyYorkshireman

savers_united wrote: »

I really do think that if that happens and these big 6 do not pass on at least 30% falls to retail customers then the government must take action or people will show their anger,

I for one will certainly be venting my anger at them if they all announce, astonishing, absurd record profits again :mad:
I don't think this current government will EVER take action on them, they just appear to be the usual pathetic rabble of "Say everything, do nothing" and as for that pathetic excuse for "Consumer Direct"... Well they obviously only put efforts into changing their name and doing nothing else.

Bring on the revolution!

Tony.

mech_2

We are probably wasting our time obsessing about wholesale gas prices. I'm pretty sure now that retail prices are set based primarily on the oil price plus a 6 month delay. Whether this really reflects the costs to the utility companies is impossible to tell. My guess is that it doesn't.

Following on the basis of past price movements, it probably means last summer's price increases won't be reversed before May or even June.

If these companies' profits turn out to be huge, maybe we'll see them hit with a windfall tax. I'm not expecting to see that actually happen though.