I don't understand the huge price increases when we are not reliant on Russia for gas

[Deleted User]

sscrabble said:

So it seems the energy companies are not making massive profits from these increases - maybe one billion they say - so who is ?  Are we being held to ransom by the likes of Saudi Arabia ?   Not accurate , but say 30,000,000 households in the UK paying £3,000 extra each - that is 90 billion EXTRA profit - and how much from business and industry another £210 billion ?   Who are we going to be giving maybe £300 billion to each year  ?

"Saudi Arabia’s largely state-owned energy firm has highlighted the colossal profits made by gas and oil-rich nations during the energy crisis by revealing profits in the three months to the end of June up 90% to $48bn (£40bn).

Saudi Aramco recorded what is believed to be one of the largest quarterly profits in history to easily beat the near $26bn it made a year earlier."

Aylesbury_Duck

sscrabble said:

So it seems the energy companies are not making massive profits from these increases - maybe one billion they say - so who is ?  Are we being held to ransom by the likes of Saudi Arabia ?   Not accurate , but say 30,000,000 households in the UK paying £3,000 extra each - that is 90 billion EXTRA profit - and how much from business and industry another £210 billion ?   Who are we going to be giving maybe £300 billion to each year  ?

And?  If the UK were sat on an incredibly valuable and finite resource, would we not charge other countries for it accordingly?  We've sold over £20bn of arms to the Saudis since 2015, so it's not one-way financial traffic.

Section62

molerat said:

The current  problems started 40+ years ago when the government sold off our energy security, the North Sea oil and gas reserves, to the highest bidder to fund a low tax regime. This has been a policy supported by parties of all colours. A case of jam today and worry about tomorrow tomorrow...

Ditto, when someone said "We see no economic case for the building of any new nuclear power stations."

In which they carefully sidestepped the point that maintaining a reasonable nuclear capacity is not just an economic decision in a troubled World.

MA260

The question needs to be asked how the current huge price increases in energy are down to basic supply and demand with Russia reducing outflows of Gas. As even with Russian supply cuts there seems to be enough energy to go around. Market Speculation in the commodity market has made a bad situation much worse. As much as prices rise they can crash too if there is a large reduction in usage across Europe. Governments need to find ways to make Gas commodity speculation less attractive and this would help bring prices down. Measures need to be taken by countries in a unified way to reduce usage in the colder months this year. Such measures in themselves would help cool the market.

Vegastare

I don't understand the huge price increases when we are not reliant on Russia for gas

This was my query on a previous thread.....it seems what we produce has to trade at world market prices so are companies make profit and they can invest in UK and their shareholder etc

Why we cannot keep our gas at a lower rate for our benefit thus lowering the price to us and the imported gas and electric would still be at a higher price - but we would have some cushioning from our own supply.

mark_cycling00

If only there was some sort of union of European countries that coordinated a response to this problem instead of allowing each country to outbid each other by bunging higher and higher amounts of money to their voters and fight over the dwindling supplies 

[Deleted User]

Vegastare said:

Why we cannot keep our gas at a lower rate for our benefit thus lowering the price to us and the imported gas and electric would still be at a higher price - but we would have some cushioning from our own supply.

Why would a North Sea gas producer sell the gas to the UK at a lower rate, when they could just sell it elsewhere for more money?

Prism

Vegastare said:

I don't understand the huge price increases when we are not reliant on Russia for gas

This was my query on a previous thread.....it seems what we produce has to trade at world market prices so are companies make profit and they can invest in UK and their shareholder etc

Why we cannot keep our gas at a lower rate for our benefit thus lowering the price to us and the imported gas and electric would still be at a higher price - but we would have some cushioning from our own supply.

Its really not our gas. We license international companies like BP, Centrica and Shell to extract it and sell it to whoever they wish at whatever price they wish. 

jj_43

MrWrighty said:

Around 50% of our gas comes from the North Sea, some from Norway and the rest from other non EU countries. We only ever imported around 3% of our gas from Russia so how come, when we produce our own, we are at the mercy of the huge increases imposed by the energy cap. Add in the enormous profits being made by the energy companies something just does not add up.

its due to our open and liberal energy markets. We have lots of interconnections that are used transport energy to the highest price area, like France, so energy prices are set at international levels. If like the US you had a gas glut from shale, and limited ability to transport the energy, prices would be low. However, even prices are starting to rise in the US as their gas is being shipped to the UK/Europe, produced at low cost and sold here to you at very high prices. Much of this activity is off the back of UK customers, e.g. companies like Centrica/BG arrange trades to purchase this gas from the US at a fraction of UK prices, they then ship it to the UK where it is sold at our very high prices. The midstream activities of these companies pocket the huge profits from this activity. 

pochase

There is no "our" supply.

The supply has been sold to companies, and they own it now. And of course they will try to sell it for the highest price. If they can sell it for £10 outside the UK, they will not sell it for £5 here.

And they are paying taxes on the profits, and they are paying windfall taxes to partly finance the energy grants given by the government.

If the taxes get to excessive, they might just leave the country, and take the taxes with them to pay them somewhere else.

And that is just the few UK based producers, the really big ones that make the big bucks are not in the UK.