Are we being ripped off...again?

drooke

Hi All,
As we all know energey prices vaulted higher repeatedly as Crude and Gas prices spiked into 2008. Since then they've dropped massively. My perception is that these price drops are not being passed on to the consumer as promptly as the imposition of the original price hikes.

Is my perception correct? Are we being taken for a ride yet again?


Regards,
David

Bark01

Hi Drooke,

Although energy prices have come down what people don't realise is that gas and electric are brought in bulk by the energy suppliers months and even years in advance.

Unfortuantly most of the UK suppliers brought a lot of gas at the wrong end of the market. So even though the wholesale prices have fallen they are stuck with a lot of expensive old power and not much room to buy up the cheap energy that is on the market today.

Another big issue is the amount of debt that uk consumers have run up with energy companies, the size of this debt means that prices need to stay higher than would be if everyone paid their bill. You also need to factor in the recent rises in extra costs to suppliers of increased social obligations such as CERT.

It may supprise many people to know but utility companies are not in general making any money out of the UK retail market.

Here is a quote from E.on on the subject

EON has stated that bad debts in the UK are running at the level of “hundreds of millions of pounds”, and that Ofgem needs to take this into account when making statements on current retail energy pricing an EON spokesman added that “we have not made a profit in the UK retail market since 2006. We will not make a profit this year.”

Geoffo_M

Bark01 wrote: »

Hi Drooke,

Although energy prices have come down what people don't realise is that gas and electric are brought in bulk by the energy suppliers months and even years in advance.

Unfortuantly most of the UK suppliers brought a lot of gas at the wrong end of the market. So even though the wholesale prices have fallen they are stuck with a lot of expensive old power and not much room to buy up the cheap energy that is on the market today.

Another big issue is the amount of debt that uk consumers have run up with energy companies, the size of this debt means that prices need to stay higher than would be if everyone paid their bill. You also need to factor in the recent rises in extra costs to suppliers of increased social obligations such as CERT.

It may supprise many people to know but utility companies are not in general making any money out of the UK retail market.

Here is a quote from E.on on the subject

EON has stated that bad debts in the UK are running at the level of “hundreds of millions of pounds”, and that Ofgem needs to take this into account when making statements on current retail energy pricing an EON spokesman added that “we have not made a profit in the UK retail market since 2006. We will not make a profit this year.”

Surely you don't believe this. Yes, this is what the energy companies want us to believe, but they can't be so badly organised as to always buy massive stocks when the price is at its very highest. Forgive me, but you are a salesman's dream. Or more probably, you work for one of them - Eon perhaps??

drooke

Bark01 wrote: »

Unfortuantly most of the UK suppliers brought a lot of gas at the wrong end of the market. So even though the wholesale prices have fallen they are stuck with a lot of expensive old power and not much room to buy up the cheap energy that is on the market today.

Frankly, I think this is nonsense. Energy companies using trading/hedging strategies allied to detailed research to ensure precisely that they don't get on the wrong side of the market wth their buying.

I assert that they're making a huge gain on the spread between what they have been paying (since Winter) in the wholesale market and what we're paying through our noses.

What I do hope is that they've invested in some gas/oil storage, which was lacking and contributed to the price overshoot last time, and have been busy buying oil/gas like crazy now. If they've been farsighted enough to do that it would be churlish of me to deny them a reasonable margin on that lower price.

Note: That margin, based on that lower price, would be significantly lower than it is now.

It's my view that the utilities,like the Govt with taxation, believe that once prices have gone up we get used to them and therefore they can get away with "forgetting" or being "unable" to drop them back down (the fuel tax rises are partly motivated by the thought that we've got used to even higher petrol prices).

They're relying on the uninformed ignorance of the public to continue this subterfuge. Because of all this I'm hesitating on switching supplier because our bills are not reflecting what the futures markets have been saying for some time.


Regards,
Dave

1carminestocky

LOL at Bark01 (what a surprise, thanked by the industry apologist Cardew :rolleyes:). The buyers at the Big 6 must be on something, I tell you. They always seem to buy their advance fuel when the price is at its highest. It's uncanny. What's that I can smell? Ah, yes.....bull****. Great big steaming piles of it....

jimexbox

1carminestocky wrote: »

LOL at Bark01 (what a surprise, thanked by the industry apologist Cardew :rolleyes:). The buyers at the Big 6 must be on something, I tell you. They always seem to buy their advance fuel when the price is at its highest. It's uncanny. What's that I can smell? Ah, yes.....bull****. Great big steaming piles of it....

So will you apologise for the 'cut' UW put on energy prices when they resell power from Npower?:rotfl:

janninew

jimexbox wrote: »

So will you apologise for the 'cut' UW put on energy prices when they resell power from Npower?:rotfl:

Now then Jimexbox, you know you cannot discuss 'that' company on this thread, you must play by the rules! If it was anybody else breaking the rules you would report them for abuse!

Oh and don't forget Carmine will not be seeing your posts, surely you haven't forgotten?

SwanJon

janninew wrote: »

Oh and don't forget Carmine will not be seeing your posts, surely you haven't forgotten?

(Sorry had to say something)
I'm sure Jim hasn't forgotten, but Carmine can still choose to see posts if he wants to.
But we all know when Carmine has put someone on ignore as he posts and quotes to tell us. Why? Does he think we don't believe him?

janninew

SwanJon wrote: »

(Sorry had to say something)
I'm sure Jim hasn't forgotten, but Carmine can still choose to see posts if he wants to.
But we all know when Carmine has put someone on ignore as he posts and quotes to tell us. Why? Does he think we don't believe him?

No comment on Jimexbox disregard for the forum rules that he preaches about to us on the 'other' thread? Or do you think the rules don't apply to him?
Carmine has every right to put somebody on ignore and his reason seems fine to me. Jimexbox's comments were getting very strange that day!

SwanJon

Sorry, yes you are right, any and all comments about 'that' supplier should be kept to that thread unless we use a pseudonym, although that sounds a bit silly. Better for everyone to be grown up about it. Just need to stop the random spammers.
I'm not questioning anyone's right to put me or anyone lese on ignore, I was merely commenting on the manner in which it was done.
As your post seem lucids and constructive, calling Jim's strange is fair from you, but you have to admit Carmine can fall into that catergory too.

jimexbox

janninew wrote: »

No comment on Jimexbox disregard for the forum rules that he preaches about to us on the 'other' thread? Or do you think the rules don't apply to him?
Carmine has every right to put somebody on ignore and his reason seems fine to me. Jimexbox's comments were getting very strange that day!

Please accept my humblest apologies for my inadvertent slip.