Shell Energy Advice

ariarnia

Grandad2b said:

EssexHebridean said:

As an aside - no energy supplier is currently making the huge profits you suggest - they are capped at a maximum of 2% profit. Shell Energy in fact are currently looking likely to be jumping out of the UK energy market due to the losses they have incurred 

You've swallowed the BS hook line and sinker. Shell ARE making huge profits out of the gas they extract and sell to Shell Energy. Can you buy shares in Shell Energy? No, of course you can't; they're part of Shell. It's exactly like the relationship between BT, Openreach, Plusnet and EE. You can buy shares in BT, none of the others.

the point is that shell global can't sell energy at 'mates rates' to shell energy. so shell global is making the same profit selling to any supplier on the open market.

the supplier (in this case shell energy) has to buy at open market prices and has to sell at the price is set by ofgem. 

its one of the main reasons why shell (the parent company) is actually thinking about stoping selling energy directly to customers and closing shell energy. they make hardly any money out of it and for a while this year made a loss. they can make more money by sticking to the production side of things. 

https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-64420520

Grandad2b

ariarnia said:

the point is that shell global can't sell energy at 'mates rates' to shell energy. so shell global is making the same profit selling to any supplier on the open market.

the supplier (in this case shell energy) has to buy at open market prices and has to sell at the price is set by ofgem. 

its one of the main reasons why shell (the parent company) is actually thinking about stoping selling energy directly to customers and closing shell energy. they make hardly any money out of it and for a while this year made a loss. they can make more money by sticking to the production side of things. 

https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-64420520

Well, no. The govt is subsidising Shell Energy and all the other suppliers. It's just that the subsidy is inadequate in the eyes of Shell. Other suppliers are still able to make a profit operating in exactly the same market. Shell didn't buy First Utility because they thought they'd make a loss. They expected to make huuuuge profits. And they will if they stay in the market.

ariarnia

Grandad2b said:

ariarnia said:

the point is that shell global can't sell energy at 'mates rates' to shell energy. so shell global is making the same profit selling to any supplier on the open market.

the supplier (in this case shell energy) has to buy at open market prices and has to sell at the price is set by ofgem. 

its one of the main reasons why shell (the parent company) is actually thinking about stoping selling energy directly to customers and closing shell energy. they make hardly any money out of it and for a while this year made a loss. they can make more money by sticking to the production side of things. 

https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-64420520

Well, no. The govt is subsidising Shell Energy and all the other suppliers. It's just that the subsidy is inadequate in the eyes of Shell. Other suppliers are still able to make a profit operating in exactly the same market. Shell didn't buy First Utility because they thought they'd make a loss. They expected to make huuuuge profits. And they will if they stay in the market.

the subsidy only started after several months of lots of companies making a loss and it wasnt retroactive. 

and they might decide to stay in or they might decide to pull out. but they certainly wouldn't be pulling out if it was as lucrative as you and others seem to think

pochase

What huge profits if they are limited by the Ofgem cap to 2% on SVT?

Grandad2b

ariarnia said:

the subsidy only started after several months of lots of companies making a loss and it wasnt retroactive. 

and they might decide to stay in or they might decide to pull out. but they certainly wouldn't be pulling out if it was as lucrative as you and others seem to think

Lots of companies that really didn't understand how energy markets work. I don't think we can include Shell or BP (partners in Pure Planet which pulled out of the market because the profits weren't attractive enough at the time) in that group.

pochase said:

What huge profits if they are limited by the Ofgem cap to 2% on SVT?

Do you think that 2% is going to last forever?

The issue is that petrochemical companies are going to face ever more difficult market conditions, especially in the developed world, as the issues of environmental degradation and climate change become ever more urgent. 

Shell need to make themselves appear 'green'. If they get out of British domestic energy supply they have to find another flag to wave. Sponsoring British Cycling isn't quite enough.

EssexHebridean

Whilst I appreciate the “mean nasty energy suppliers making huge profits ripping off old ladies” style rhetoric helps the likes of the Daily Fail sell lots of papers  Grandad2b, it’s not an accurate portrayal of the current situation of the U.K. market (as several people have tried to explain to you), and nor is it of any assistance whatsoever to the OP.  

[Deleted User]

Grandad2b said:

EssexHebridean said:

As an aside - no energy supplier is currently making the huge profits you suggest - they are capped at a maximum of 2% profit. Shell Energy in fact are currently looking likely to be jumping out of the UK energy market due to the losses they have incurred 

You've swallowed the BS hook line and sinker. Shell ARE making huge profits out of the gas they extract and sell to Shell Energy. Can you buy shares in Shell Energy? No, of course you can't; they're part of Shell. It's exactly like the relationship between BT, Openreach, Plusnet and EE. You can buy shares in BT, none of the others.

Dolor said

The parent companies of BP and Shell, for example, are not British companies. They are international companies making profits across the World. Only 5% of Shell’s income comes from its UK operations.  I believe that the Government already taxes them at 40% for the profits made in the UK. Bear in mind that many of the dividends that these companies pay goes into insurance funds that pay future pensions. I appreciate that this is little comfort when retail energy prices are so high.

So when Shell and BP report massive profits are those their worldwide profits or just the profits from their UK operations?
(I think I know the answer but it would be nice to have it confirmed).

If it's worldwide profit then the likes of Sir Kier Starmer are effectively saying to multinationals "Don't be based in Britain". That may not be what they want to hear.

The profits quoted are for the company’s World-wide operations. Shell pays tax on the proportion of the profits earned in each country. Tax details are in its Annual Report.

https://reports.shell.com/annual-report/2020/?accept=1

UK Tax Data here:

https://reports.shell.com/tax-contribution-report/2020/our-tax-data/europe/united-kingdom.html

pochase

Grandad2b said:

ariarnia said:

the subsidy only started after several months of lots of companies making a loss and it wasnt retroactive. 

and they might decide to stay in or they might decide to pull out. but they certainly wouldn't be pulling out if it was as lucrative as you and others seem to think

Lots of companies that really didn't understand how energy markets work. I don't think we can include Shell or BP (partners in Pure Planet which pulled out of the market because the profits weren't attractive enough at the time) in that group.

pochase said:

What huge profits if they are limited by the Ofgem cap to 2% on SVT?

Do you think that 2% is going to last forever?

The issue is that petrochemical companies are going to face ever more difficult market conditions, especially in the developed world, as the issues of environmental degradation and climate change become ever more urgent. 

Shell need to make themselves appear 'green'. If they get out of British domestic energy supply they have to find another flag to wave. Sponsoring British Cycling isn't quite enough.

What information do you have that Ofgem is going to increase the 2% margin? Can you please post the link to the Ofgem press release?

Grandad2b

@EssexHebridean: True, no help to the OP whatsoever. I'll bow out.