Naive question

71peyman71

With many energy companies announcing record profits, why did the price cap need to rise? Who is ofgem on the side of? I thought it was supposed to be on the side of the people?

Evan3020

No energy companies have posted record profits?
You are confused with oil and gas producers.

sevenhills

Evan3020 said:

No energy companies have posted record profits?
You are confused with oil and gas producers.

Some energy companies both produce and sell energy, the ones that produce energy will have much higher profits.

https://www.statista.com/statistics/540495/scottishpower-revenue/#:~:text=ScottishPower UK Plc generated annual,British pounds that same year.

[Deleted User]

Shell Energy Retail which supplies UK domestic electricity and gas customers made a loss of £121.58M in the year ending December 2020.

Octopus Energy faired somewhat better. It achieved a profit of £24.9M in the Year ending April 2021. At the time it was reporting 2.1M customers which equates to a profit of £11.56 per customer.

gj373

Just as an example...

I'm with Sainsbury's Energy. Unless I'm mistaken Sainsburys don't drill for gas or produce electricity. They have to buy it from someone.

Astria

The company you are billed by and send money to are basically a company who buy and sell fuel and nothing more. They are likely not making record profits.

The companies who are producing the fuel are making record profits, and maybe in the same group of companies.

and don't forget that a lot of these companies have been making a loss when they were selling energy for less than they were paying for it, they want that money back with interest! But can still only make a profit of about 3%

[Deleted User]

gj373 said:

Just as an example...

I'm with Sainsbury's Energy. Unless I'm mistaken Sainsburys don't drill for gas or produce electricity. They have to buy it from someone.

Sainsbury’s Energy is a white-label supplier with all energy; billing and customer service provided by E.on Next. E.on Next is part of the E.on Group which produces energy from nuclear; wind and coal.

71peyman71

I know there is a difference between the retailers and the companies that dig the stuff out of the ground. 
But take Shell for example which I am with for my domestic use, surely their retail arm is part of the global entity. Same for BP and their fuel forecourts selling unleaded and diesel. BP is amongst the most expansive.    

Evan3020

What are you suggesting happens then?

BUFF

71peyman71 said:

I know there is a difference between the retailers and the companies that dig the stuff out of the ground. 
But take Shell for example which I am with for my domestic use, surely their retail arm is part of the global entity. Same for BP and their fuel forecourts selling unleaded and diesel. BP is amongst the most expansive.    

But the amount of turnover & profit of their domestic energy supply business in the UK is a minimal % of the global entity's.
Why should e.g. their oil operations in Nigeria subsidise domestic energy users in the UK?

Afaik BP don't sell electricity or gas domestically in the UK (they got their fingers burnt with Pure Planet) so the cap has nothing to do with them.

wittynamegoeshere

It's all part of the plan.  Sadly many have been fooled into thinking all this is somehow OK, based upon nominal barriers between different divisions within the same companies.  I'm convinced that PR people are posting here and elsewhere on behalf of the energy companies to try and convince the sheeple that they're not actually laughing their heads off at us all handing our money over.

Gas and oil costs the same to get out of the ground and process as it did last year, yet this winter they are charging 3x the price they did last winter.