Can someone explain again - how are energy companies make so much profit?

Mstty

BBC News - Profits triple to £3.3bn at British Gas owner after energy prices soar

https://www.bbc.co.uk/news/business-64652142

Not the worse reporting it does have some horror headlines but some semi decent analysis.

TheGardener

There have been some interesting takes and explanations - thank you all for responding to my knee-jerk post (I was reading the papers over breakfast and practically spat my coffee across the table when I read the headline) 
But you know what - no amount of explaining or telling me my pensions are better because if it (I maybe wouldn't need such a big pension if the energy bills were lower...) or that its 'breaking laws' or that 'there wouldnt be enough investment' or that noone in their right mind would sell for less than the market price'... can take away the fact that something can't be right when wealth is so unevenly distributed. Don't get me wrong - I'm no socialist, I believe in reward for hard work but let's face it  - we're all getting pretty shafted at the moment - well, that's what it feels like to me. 

ariarnia

TheGardener said:

There have been some interesting takes and explanations - thank you all for responding to my knee-jerk post (I was reading the papers over breakfast and practically spat my coffee across the table when I read the headline) 
But you know what - no amount of explaining or telling me my pensions are better because if it (I maybe wouldn't need such a big pension if the energy bills were lower...) or that its 'breaking laws' or that 'there wouldnt be enough investment' or that noone in their right mind would sell for less than the market price'... can take away the fact that something can't be right when wealth is so unevenly distributed. Don't get me wrong - I'm no socialist, I believe in reward for hard work but let's face it  - we're all getting pretty shafted at the moment - well, that's what it feels like to me. 

i think a lot of people agree with you. but we were happy enough with the system when it gave us cheap energy fixes so thats also something we need to think about. if we dont want costs to skyrocket when something breaks down then maybe we also need to accept we shouldn't always demand cheaper and cheaper goods and services so resilience can be built in?

one of the things that annoyed me was people complaining in the before times that if they dont switch suppliers then they are worse of than people who take the time to find a good deal. so they introduced the cap to 'protect' people from market forces and thats one of the big things that caused this crash in the first place. 

that and complaining about how high the standing charge is (complaining about the green policies) but now complaining about there not being enough investment in the infrastructure and alternative energy sources. 

Mstty

TheGardener said:

There have been some interesting takes and explanations - thank you all for responding to my knee-jerk post (I was reading the papers over breakfast and practically spat my coffee across the table when I read the headline) 
But you know what - no amount of explaining or telling me my pensions are better because if it (I maybe wouldn't need such a big pension if the energy bills were lower...) or that its 'breaking laws' or that 'there wouldnt be enough investment' or that noone in their right mind would sell for less than the market price'... can take away the fact that something can't be right when wealth is so unevenly distributed. Don't get me wrong - I'm no socialist, I believe in reward for hard work but let's face it  - we're all getting pretty shafted at the moment - well, that's what it feels like to me. 

I have felt shafted since my very first pay packet with the deductions table.

Being good taxpayers our whole lives I can say we will put in more than we will ever take out. We call it our contribution to society.

You can get too bogged down in all the different ways you are being shafted and just buy some lube (makers mark)

Joking aside it is not just a UK problem it's a worldwide problem and you might not believe it but we are not paying the highest for our energy so other countries do import more makers mark than others to ease the pain.

TheGardener

@ariarnia I guess my comments were really broader than just energy - I have children in the emergency services earning less than a banker would spend on a weekend break - I have relatives with caring responsibilities that are overwhelming - I witnessed an elderly man burst into tears at a supermarket checkout because he didn't have enough money to pay for a small basket of food - a man I know worked hard all his life - and I know I am one of the millions struggling with the cost of everything. I also know much of it falls into the 1st world problems category - but still ... They say - we pay, justified by 'laws' and 'markets' is the only way forward... hey ho, such is life. 

ariarnia

TheGardener said:

@ariarnia I guess my comments were really broader than just energy - I have children in the emergency services earning less than a banker would spend on a weekend break - I have relatives with caring responsibilities that are overwhelming - I witnessed an elderly man burst into tears at a supermarket checkout because he didn't have enough money to pay for a small basket of food - a man I know worked hard all his life - and I know I am one of the millions struggling with the cost of everything. I also know much of it falls into the 1st world problems category - but still ... They say - we pay, justified by 'laws' and 'markets' is the only way forward... hey ho, such is life. 

defo. but its driven by our choices. we want low taxes and cheap stuff (not meaning anyone here or blaming the people who are struggling but we as in people together and what we want/complain about when times are good). so when something goes wrong it all goes wrong. food in the supermarket is expensive because so much of the cheap stuff was at the expense of the farmers or was imported. so when the farmers couldnt keep swallowing the increased costs of animal feed eg and stuff was costing so much more to ship around because of the cost of oil then it has to go up. was a £2 chicken ever ethical or sustainable? 

70sbudgie

I know this is probably akin to throwing a firework in the bonfire, but I think, in general, the younger you are, the more likely you are going to be shafted by the current system (in the long run). Those that were able to secure their slice of the pie, years ago when then were fewer people to share the pie amongst are generally going to have a bigger slice. And it is a sliding scale. 

It is not a criticism of any one individual or where any individual is on the scale, it is just an observation that the system no longer works for the vast majority of people.

ariarnia

and single people. in general. i see it with our friends who are the same ages as us but dont have kids and are single and they have so many plates to juggle with what seems like a lot less choice and options. not saying its easy for us and kids add there own problems and costs but two people and incomes make it easier to balance things. and you seem to get more sympathy with problems (but maybe thats just our experience)

[Deleted User]

We are off topic but the fact that we are an ageing population should not have come as a surprise to any Government. State pensions and benefits are paid for by those in work: this is how it has always been. What has changed is the ratio of the old to the young which will get worse over the next 10 years. The old will become an increasing burden on the young: yet we that are old believe that, as we have contributed to the State for 50 years, we have an enshrined right to a comfortable retirement. I suspect many youngsters have a contrarian view: they just want to keep enough of their earnings to buy a house and support their families.

People will argue that they are working hard but the statistics indicate that we are 20% less productive than our US cousins. We are short of key workers but the thought of increased immigration remains an anathema to many. My daughter took her skills to Canada where she is now a senior vice-president of an international insurance company. I can see many others following in her steps with Western Australia making no secret of the fact that it wants our skilled workers.

I confess that I have no idea how our politicians will deal with this challenge. It is much more than complicated than a windfall tax on energy producer profits.

Qyburn

Stopping people coming to Britain to work won't have helped either.