The 5% profit!

Wallhart

It's a load of rubbish and yet I have only heard one person pub locally speak about it in the media. Why is this?

Btw I'm happy to be proven wrong.

So the energy giants like to tout that they only make 5% profit from you. A good attempt to make you accept the price rises.

This number however is very easy to manipulate because they can push profit anywhere they like. They can hedge, buy in, prices they buy in the markets at the lows and charge the retail arm, the bit we buy our energy from at the highs. As long as at the time the inter company contract is made it is at market prices, therefore meeting transfer pricing rules, they can do this. Therefore the wholesale arm, or the company most like domiciled in a low tax country can make the profits yet the retail arm can charge higher prices.

Why does no mo or newspaper comment on this. The only person I have heard publically comment on this is a person from an Eco energy supplier.

Cardew

Wallhart wrote: »

Why does no mo or newspaper comment on this. The only person I have heard publically comment on this is a person from an Eco energy supplier.

I don't think you are correct; that aspect, and the lack of transparency, is commented about all the time.

With audited accounts and tax liabilities, the the UK distribution arms of the energy companies are not making massive profits. Also our energy prices - particularly gas - compare favourably with the rest of Europe, and that includes taking into account the Green and Social levies.

The distribution arms and the various European Energy producing companies can hide behind their 'Commercial Confidentiality' clauses to prevent scrutiny.

MillicentBystander

How is the fact that npower pay no corporation tax reflection reflected in their figures? Genuine question because I'm by no means an accountant.

I do have sympathies with the OP's assertion on account of the much higher (and far less reported) profits the Big 6 make from their wholesale/distribution arm. Perhaps the *real* profit figure is actually something like 12.5%? In other words, way higher than the oft-peddled 'they make less profit than Tesco' excuse.

[Deleted User]

No-body likes paying more than they have to but ultimately they are a business and they invest in the country and economy - People seem to want them to make no money and not invest.

Nobody argues with Tescos making millions in profits..

MillicentBystander

HeHe...and as if by magic here comes the Tesco post. See post #3.