Ofgem Cap Price October 2022

vincent64

Regardless of what price Ofgem set the cap at on Friday, the energy companies can ignore that price and set their prices lower. Let's face it most of them of have made millions over the last 12 months. They need to give back to the customer.

QrizB

vincent64 said:

Regardless of what price Ofgem set the cap at on Friday, the energy companies can ignore that price and set their prices lower. Let's face it most of them of have made millions over the last 12 months. They need to give back to the customer.

They haven't made millions. As I wrote an hour ago in this thread:

Energy supply companies are making around 2% per customer in profit (EBIT) when selling at the cap.
The profits are being made by the big oil & gas extraction companies - Saudi Aramco, Petro China, Exxon Mobil and the like - over which the UK government has very little influence. (Saudi Aramco's revenues, for example, are larger than the entire UK tax revenue.)

pochase

Can you please post a P+L of a supplier that shows them making huge profits? Supplier, not producer!

Astria

QrizB said:

vincent64 said:

Regardless of what price Ofgem set the cap at on Friday, the energy companies can ignore that price and set their prices lower. Let's face it most of them of have made millions over the last 12 months. They need to give back to the customer.

They haven't made millions. As I wrote an hour ago in this thread:

If we assume a typical usage of 12,000 kWh gas and 2,900 kWh electric, that gives a typical household energy bill of £1970. Assuming a typical energy company has 2.2 million customers that's 4.3 billion, and 2% of that is 86 million, so technically they could be making millions  

But definitely not the billions that the media are reporting.

They could put the prices lower than the price cap, but they are not going to sell it cheaper than what they can buy it for, so I wouldn't expect more than a pence or so here and there.

pochase

If they give up the whole profit margin, they would be able to reduce the energy cost by £20 per  £1000 energy bill

So if somebody has a £2500 energy bill they would be paying £50 less, that is slightly more than £4 per month savings. So instead of 208.33 they would pay now £204.10.

The huge profits would really make a difference for energy users. 

jj_43

yes there are suppliers that self supply, making huge profits.

QrizB

jj_43 said:

yes there are suppliers that self supply, making huge profits.

An example, please, with evidence?

[Deleted User]

jj_43 said:

yes there are suppliers that self supply, making huge profits.

Evidence would be good, especially as this is specifically not allowed.