Regulator's Energy Price cap algorithm fit for purpose ?!

Astria

wittynamegoeshere said:

I get the feeling that the PR departments of several energy suppliers may be hiding behind a few of the IDs on this forum.

Whatever the subject, the energy industry is always honest and decent without question.

All this while bills have trebled.

I'm not saying that I know the answer, just that the question of how and why our bills are so high doesn't seem to be getting asked, and many seem keen to silence any such debate.

Obviously there are major external influences.  But we should be semi-detached from the EU's issues.  Not unaffected, but not joined at the hip either.  We do import, but we also have our own resources, and many non-fossil fuel sources of power.  Our prices should be higher than they were, but there's no reason why they should directly mirror what's going on in Germany and elsewhere.  Our prices should be somewhat affected, a lot like in the USA.  Instead I get the impression that this has been seized upon by an industry that was waiting for an excuse to shut down competition and raise prices.

I agree with you, I think lots of people are making a lot more profit than they used to under the disguise of "well, everything is going up in price". Petrol for example is still between 185.9 and 191.9 and the petrol stations are hiding behind "We are only making small profits, typically 2 - 3p per litre", but in that case how are Asda selling at 175.7? and before people shout up and say they are making a loss to encourage more people to visit their stores, independent garages are selling even lower (I've seen 169.9). I believe stations are keeping prices artificially high on purpose because "the public are now used to the higher prices and will pay it".

ihatetrump

wittynamegoeshere said:

I get the feeling that the PR departments of several energy suppliers may be hiding behind a few of the IDs on this forum.

Whatever the subject, the energy industry is always honest and decent without question.

Re your first line - not me - that's for sure - actually a Chartered Accountant for my sins -

I'm one of those who fortunately saw the whole storm coming and chose the longest fix I could get last September - sitting smug with EDF paying 19.02 per KwH for electricity and 3.74p per KwH for gas - fixed until September 2024 - already saving for the shock that will hit me on 1st October 2024.

Not sure I agree with your comment 'the energy industry is always honest and decent without question' - you'll see from some of my other posts I've had a bit of a pop at AVRO along with some of the other rogue (now defunct) suppliers - IMHO they are anything but honest and decent and took the whole sector for a very expensive ride.

OFGEM may be honest and decent, but they certainly fell asleep at the wheel - which served to exacerbate what was already a disaster waiting to happen - poor regulation and oversight. 

MattMattMattUK

Astria said:

wittynamegoeshere said:

I get the feeling that the PR departments of several energy suppliers may be hiding behind a few of the IDs on this forum.

Whatever the subject, the energy industry is always honest and decent without question.

All this while bills have trebled.

I'm not saying that I know the answer, just that the question of how and why our bills are so high doesn't seem to be getting asked, and many seem keen to silence any such debate.

Obviously there are major external influences.  But we should be semi-detached from the EU's issues.  Not unaffected, but not joined at the hip either.  We do import, but we also have our own resources, and many non-fossil fuel sources of power.  Our prices should be higher than they were, but there's no reason why they should directly mirror what's going on in Germany and elsewhere.  Our prices should be somewhat affected, a lot like in the USA.  Instead I get the impression that this has been seized upon by an industry that was waiting for an excuse to shut down competition and raise prices.

I agree with you, I think lots of people are making a lot more profit than they used to under the disguise of "well, everything is going up in price".

Everything is going up, that is inflation.

Astria said:
Petrol for example is still between 185.9 and 191.9 and the petrol stations are hiding behind "We are only making small profits, typically 2 - 3p per litre",

They are now making around 5p per litre, they mark up a percentage, as the overall price has increased their profit has increased, even though their margin has not.

Astria said:
but in that case how are Asda selling at 175.7? and before people shout up and say they are making a loss to encourage more people to visit their stores

Well that depends, where I live supermarkets are selling around 1.77, some of the high traffic petrol stations are in the 1.77-1.79 price range, but some of the larger stations that are in less prime routes are charging in the 1.80-1.81 range. Supermarkets have always been willing to cut margins, it helps with customer loyalty. 

Astria said:
independent garages are selling even lower (I've seen 169.9). 

None of the independents around here are significantly lower than the majority. One is always about 2p cheaper than Morrisons and it always has been, another offers 5p off per litre if you spend £30 or more in store. They may well also be willing to accept lower margins and that would be a decision the individual station owner could choose to do.

Astria said:
I believe stations are keeping prices artificially high on purpose because "the public are now used to the higher prices and will pay it".

There is no "artificially high", the cost associated with providing fuel, as well as competition in the market. If there was sufficient overhead between supply costs and current selling then competition would bring that down, but there is not, the government enquiry to fuel costs after the fuel duty cut found that the price at the pump was not excessive based on input costs. Overall the cost of the unrefined fuel has risen significantly, because of a rise in the dollar price per barrel, the lack of sufficient refining capacity and the drop in the value of Sterling. Nationally wage and premises costs across the whole supply chain are significant, many fuel tanker drivers have had 50% or greater increases in pay over the last 12-18 months, business energy costs are 3-5 times higher than a year ago etc.