Octopus Tracker

CSI_Yorkshire

Doc_N said:

peter3hg said:

Doc_N said:

CSI_Yorkshire said:

Doc_N said:

QrizB said:

Telegraph_Sam said:

I think Doc_N's latter interpretation is what I have in mind.
My Tracker gas unit price(s) as per invoice corresponds to what the Northern formula predicts. The difference between this my retail price and the wholesale price is Octopus' margin or mark-up which I had been querying.
I hope that the explanation is no more complicated than that!

That's also quite easy to explain. There are costs incurred in supplying you (or me) with a kWh of gas that are above and beyond the wholesale gas price.

The Tracker illustration applet on Octopus's website illustrates these costs.

I don’t think anybody’s disputing the fact that there are large costs involved between pipeline and customer, not the least of which will be transmission and billing.

What might well be disputed though is whether a markup of 42% is reasonable, given the huge volumes concerned. That’s an area for Ofgem though. 

I think people might have an issue with you describing it as 'markup' - which to many people means "profit" - rather than 'difference between wholesale and total cost'.  And to be fair, T_S did say "gross" when originally posing the comment, so it clearly isn't what they meant - just how it gets interpreted. 

Plus many of the charges are per-kWh, so huge volume doesn't make it cheaper.

edit in italics.

Markup and gross profit rates are very clear to those who understand finance, as is the difference between net and gross profit.  Commodities, such as energy, usually have low markups because they're sold in volume, as is the case here.

The only thing that's in any doubt is whether a 42% markup is a reasonable return.

In the price cap, the calculation for the unit rate gives a 50% "markup" for gas above the wholesale component and the unit rate for electricity gives a 76% "markup" over the wholesale component.

On that basis 42% markup for Octopus on gas seems perfectly reasonable.

Could well be. How can you trust Octopus, though, when it claims this tariff to be a loss maker?

If the 50% 'markup' on the price cap results in 1.9% (or 2.4%) profit, wouldn't it make sense that 42% 'markup' could plausibly result in a loss maker?

Or is there some secret factor only known to "those who understand finance"?

matt_drummer

Forgive me if I am wrong, I thought the Octopus Tracker tariff was the cheapest gas around?

If that is the case, and it's significantly cheaper than the price cap, why is anybody questioning the profit margin and mark up?

StarTrekkie007

Although energy prices are falling do you think it will continue ?

Would it be better to stick to the variable tariff and wait a year before investigating fixed rate options ?

In the current climate would variable rate tariff be overall the cheaper option ?

bristolleedsfan

StarTrekkie007 said:

Would it be better to stick to the variable tariff and wait a year before investigating fixed rate options ?

Octopus Tracker is not only a variable rate tariff, it is more variable than a typical variable rate tariff.

Spoonie_Turtle

westv said:

Spoonie_Turtle said:

westv said:

Griffindog said:

westv said:

I'm currently on v3
Current caps

electric 23.19p per kWh Standing charge 48.26p per day Gas Unit price 6.12p per kWh Standing charge 27.22p per day

 

I have never seen those caps before. v3 has been 40p/11p but reduced to the equivalent of SVR by the EPG.

Ah. maybe they were the rates as of 13/7/22 when Octopus emailed me to confirm I was on Tracker.

Edit: Considering the rates are variable, is there any way to work out the expected cost Flexible v Tracker?

You could choose to go by historical average prices, but there's no certainty from that at all for future prices.

Will Flexible, on average, be more expensive though?

Historically, yes; future, probably if things stay stable.  If they don't, then it's anyone's guess.

Chrysalis

bristolleedsfan said:

..................

Octopus is going downhill a bit now on their flexibility for moving tariffs I think, for whatever reason it seems they dont like the idea of letting people move on and off the tariff rapidly in reaction to market conditions, so its a kind of stick with it via high pricing periods or get off and stay out of town thing.

It wouldnt surprise me though if this is to scare people off, as the waiting list is an indication they never wanted the tariff to be as popular as it is now.

CSI_Yorkshire

Chrysalis said:

bristolleedsfan said:

..................

Octopus is going downhill a bit now I think, for whatever reason it seems they dont like the idea of letting people move on and off the tariff rapidly in reaction to market conditions, so its a kind of stick with it via high pricing periods or get off and stay out of town thing.

It wouldnt surprise me though if this is to scare people off, as the waiting list is an indication they never wanted the tariff to be as popular as it is now.

I wouldn't have expected them to allow people to move on and off the tariff like that, so I'm surprised it lasted so long.  You have to take the ups and downs together, not jump on the tariff for a day because it looks cheap and then off again tomorrow when the price goes up.

[Deleted User]

Chrysalis said:

bristolleedsfan said:

..................

Octopus is going downhill a bit now I think, for whatever reason it seems they dont like the idea of letting people move on and off the tariff rapidly in reaction to market conditions, so its a kind of stick with it via high pricing periods or get off and stay out of town thing.

It wouldnt surprise me though if this is to scare people off, as the waiting list is an indication they never wanted the tariff to be as popular as it is now.

Octopus found that when there were no switch restrictions and no exit fees that some customers were switching in and out of Agile as prices fell and rose so they brought in the 30 day rule. There was a mass migration to Agile last year when this forum and others pointed out that the Cap limit was effectively a fix. You cannot blame any supplier from trying to manage a mass influx/exit process. There has to be a cost when consumers change tariffs. I wouldn’t describe it as ‘going downhill’.

Chrysalis

Griffindog said:

I wonder if they will introduce a new version with lower caps once they have weeded out all the ‘stay safe’ people?

Last year I hovered over leaving for quite a while but fortunately my summer bills are quite low so I didn’t pay too much extra. It has definitely been worth sticking with it. £1/30p caps could be eye watering though. I can’t afford to stick around if prices go really high.

With the tariffs no longer being fixed, a cap wouldnt mean much anyway, as they could raise it in reaction to the market. it is almost effectively capless now. Although there may be a notice period they have to give before making changes, that would be the length of the protection. I dont mind the 2 weeks, and I am not risk averse, but they seem to be making efforts to cooldown demand for the tariff.

Chrysalis

Dolor said:

Chrysalis said:

bristolleedsfan said:

..................

Octopus is going downhill a bit now I think, for whatever reason it seems they dont like the idea of letting people move on and off the tariff rapidly in reaction to market conditions, so its a kind of stick with it via high pricing periods or get off and stay out of town thing.

It wouldnt surprise me though if this is to scare people off, as the waiting list is an indication they never wanted the tariff to be as popular as it is now.

Octopus found that when there were no switch restrictions and no exit fees that some customers were switching in and out of Agile as prices fell and rose so they brought in the 30 day rule. There was a mass migration to Agile last year when this forum and others pointed out that the Cap limit was effectively a fix. You cannot blame any supplier from trying to manage a mass influx/exit process. There has to be a cost when consumers change tariffs. I wouldn’t describe it as ‘going downhill’.

I described it as downhill as its effectively a nerf to what was on offer before, it may seem harsh and with Octopus being the best supplier out there, there may be a tendency to want to defend them, but there is no denying whats happening.  I was going to actually edit my post and remove the downhill part, as even I felt it a bit harsh after I hit submit, but you already replied now.

The question is, why does there have to be a cost?  When signing up its automated, how does exiting the tariff currently work when its "not" been done over the phone or email?

Will we see exit fees next?