Gas prices to fall?

melbury

Hello everybody - I've just got back from holiday and heard on the news that gas prices are set to fall next year. Apparently they cannot come down before then because the utility companies buy forward. However, isn't this great news?

masonic

I'm not sure we'll see our bills slashed, but it will certainly be a relief to move away from the trend of the past few years.

oldwiring

Those who have bought forward at the higher prices may find that competition forces them to reduce at a quicker rate than they would ideally wish. If they do not they risk losing market share.

bud-miser

oldwiring wrote:

Those who have bought forward at the higher prices may find that competition forces them to reduce at a quicker rate than they would ideally wish. If they do not they risk losing market share.

You are using the assumption that this is a competitive market. Have you ever heard of the concept of cosy-Sunday-morning-golf-course conversations...?

alanobrien

melbury wrote:

Hello everybody - I've just got back from holiday and heard on the news that gas prices are set to fall next year. Apparently they cannot come down before then because the utility companies buy forward. However, isn't this great news?

They could if they wanted them to but they will hang on to the existing high prices as long as they can.

Now the new pipeline to Norway is open and the Dutch pipeline is imminent it will be difficult for them to justify high prices for much longer though.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/10/cngas10.xml

http://www.bloomberg.com/apps/news?pid=20601072&sid=aHhIAJUtSSBQ&refer=energy

Cardew

British Gas lost £200 million last year, and they don't charge less than the other companies.

I think only a supreme optimist will think there will be anything more than a token cut – in cynic mode I could add we are 3 years away from a General Election.

The regulator will have the final say on prices.

kat21

I personall feel what this is all about is carbon emissions and the government. I dont see prices dropping because in the long term it will help keep carbon emissions down which is what the government and in particular Europe want. I also read that countries can sell their quotas to other countries so, the government is winning hand over fist. Then theirs the vat added to it too, so, personally with europe medlling and the governement wishing to reduce carbon emissions and to possilby sell any quotas not used to other countrys its the poor consumer that will suffer.
kat21

masonic

kat21 wrote:

I dont see prices dropping because in the long term it will help keep carbon emissions down which is what the government and in particular Europe want.

That would rely on the assumption that increasing prices would cause a reduction in demand for gas and electricity. Do you think that is likely? It doesn't seem to have happened so far.

kat21

I think it has an is happening you look at how many posters are saying they have this size house or flat or how much fuel is being consumed and how we are being re educated about becoming more energy efficient. Loft insulation, more efficient boilers. Yes, we are cutting back not because we wish too but because those most vulnerable like myself have no real choice. Just look around the internet in regards to carbon emissions and the government so, by making the prices higher your darn right I will not dare use too much fuel, net result reduction !
kat21 and if we all reduce
then emissions get lower and the government can sell our un spent emissions to another country
another brilliant money saving tip by the government

masonic

kat21 wrote:

net result reduction

But if you look at energy consumption figures for the UK over the last 5 years there has been no reduction.

I think the prices can be explained as a simple effect of supply and demand.

kat21

consumption could mean many different things, such as industry more people living in our country which there are
kat21
keep a note of this, gas will not be reduced due to our governments policy on carbon emissions brought about by europe. Prices will not fall back
kat21