Why high energy prices.

[Deleted User]

bikeman said:

Quite simply the wholesale arm of Shell, BP etc pull the oil and gas out of the north sea relatively cheaply. They then sell it at the agreed golbal wholesale rate to their own retail company ie they make a massive profit on this transaction.

The government has set a limit on the price that the retail company can then sell it to us based upon that wholesale price. The upshot is the retail arm of Shell, BP etc have to buy high and then sell with limited margin, boo hoo on them. So the retail arms of energy companies dont make much profit, hence 30 of them going out of business recently.

However the price cap rate is still high so us retail customers have effectively paid BP/Shell wholesale a massive windfall when their costs have remained comparatively low. North sea gas is very much cheaper to produce then it is to buy Russian gas BUT we dont benefit in anyway because both are priced the same.

The system is corrupt and our govt is doing fk all to rectify it.

The biggest shareholders in BP are financial institutions in the US and Israel. I am not sure that they would sanction BP selling their products at below World market prices just because the cost of extraction is less in the North Sea than the Saudi desert (that said, I am not sure that it is). It might be different if the UK Government held a Golden Share.

Similarly, for Shell: