Fuel companies going bust

Iangiggal

I have just read that the fuel bills will rise by 85 pounds next year because of the fuel companies going bust. Could it just perhaps be the success of mse in getting people changing to the cheapest that causes these companies to cut their own throats with a view to trying to keep getting new customers to improve their cash flow albeit temporarily. Do mse think that a. This is a good thing and b. Cannot an argument be made for offgen to pay the losses from other funds because they allowed these under capitalised companies to trade in the first place.
Just a thought

HeinzVarieties

Iangiggal said:

I have just read that the fuel bills will rise by 85 pounds next year because of the fuel companies going bust. Could it just perhaps be the success of mse in getting people changing to the cheapest that causes these companies to cut their own throats with a view to trying to keep getting new customers to improve their cash flow albeit temporarily. Do mse think that a. This is a good thing and b. Cannot an argument be made for offgen to pay the losses from other funds because they allowed these under capitalised companies to trade in the first place.
Just a thought

No.

Nobody has a gun to their heads forcing them to offer rock bottom prices, and given the number of people with the Big 6, clearly not that many people are switching anyway in the grand scheme of things.

The reason these companies are going bust is inept management who didn't hedge their costs.

QrizB

Iangiggal said:

Just a thought

Conventionally, trade relies on buying low and selling high.

Some energy companies decided to try buying high and selling low. The results weren't a surprise to anyone.

Thrugelmir

No business will last long selling it's products at a loss. Energy is something we all use in one form or another. Other than from consumers where does Ofgem get it's funding from?  The availability of magic money trees is diminishing in the current era of somebody else should pay rather than me culture. 

Shedman

Thrugelmir said:

No business will last long selling it's products at a loss. 

 Not necessarily.   Amazon as one example has...given it ran at a loss for 9 years from start up.

(But your basic premise tends to be true)

[Deleted User]

Thrugelmir said:

No business will last long selling it's products at a loss. Energy is something we all use in one form or another. Other than from consumers where does Ofgem get it's funding from?  The availability of magic money trees is diminishing in the current era of somebody else should pay rather than me culture. 

Ofgem is a non-Ministerial Government Department within BEIS.

Quote: Ofgem is funded by a licence fee levied on the energy industry, and not by taxpayers. The £31 million of fines it has imposed on the industry since 2002 is not used to fund Ofgem, but is paid directly to the Treasury. Ofgem E-Serve's costs of administering environmental programmes are met from a variety of sources. Unquote

Guess who ends up paying the energy industry?

Thrugelmir

Shedman said:

Thrugelmir said:

No business will last long selling it's products at a loss. 

 Not necessarily.   Amazon as one example has...given it ran at a loss for 9 years from start up.

(But your basic premise tends to be true)

Amazon had backers with deep pockets and a long term strategy. Forcing the competition out of business does take time. Though interestingly Walmart is currently a far more profitable retailer than Amazon and Amazon's retail division lost money in the last set of financial results. Only by luck and chance did AWS find itself in pole position in the sector. This division more than makes up for failings elsewhere. Splitting the company up may well ultimately provide the best long term returns to shareholders. 

QrizB

Dolor said:

Thrugelmir said:

Other than from consumers where does Ofgem get it's funding from?

Ofgem is funded by a licence fee levied on the energy industry.
Guess who ends up paying the energy industry?

From consumers of energy, exactly as Thrugelmir said? Or are you making some subtle point that I've completely missed?