How much did the energy companies share the burden of the price increases?

matt_drummer

peter021072 said:

Spoonie_Turtle said:

peter021072 said:

I recall someone once saying that the suppliers were effectively nationalised due to the constraints put on them by the energy price caps.  This implied they were sharing the burden.  In which case could someone tell me why Centrica's share price has doubled since Russia's invasion of Ukraine and why consumers are so apathetic?

Because Centrica is not a domestic energy supplier in Britain.  (I don't think they are anywhere, but that's irrelevant as you're only talking about suppliers and the energy cap that applies here.)

They are the parent company of British Gas, the biggest energy supplier in the country.

They are.

But they still aren't a UK energy retailer in themselves.

Most of the profits Centrica make do not come from retailing energy in the UK.

Why is it so difficult to understand that energy is sold to the world and our prices are affected by how much other countries are prepared to pay?

If there was cheaper energy around then somebody would be buying it and selling it to us for less than everybody else.

This is the the price at the moment.

These companies make large profits because they are large companies with a large number of customers.

Is it really that difficult to understand?

QrizB

Possibly a provocative comment, but as a Centrica shareholder I'm very happy with their current share price

matt_drummer

QrizB said:

Possibly a provocative comment, but as a Centrica shareholder I'm very happy with their current share price

It's a great comment.

Lots of people and pension schemes benefit from their performance.

Its not all bad news!

peter021072

A tale of two graphs. The first is the share price of Centrica (an UK energy supplier through British Gas), the second a comparison of electricity prices across the continent between Winter 2020 and Summer 2022.

Incidentally, the French successfully nationalised their supplier EDF and subsidised the prices, benefitting the less well off at the cost of shareholders. However EDF is a British supplier as well, so they reap the benefit of our higher energy prices.

matt_drummer

peter021072 said:

. However EDF is a British supplier as well, so they reap the benefit of our higher energy prices.

No they don't.

EDF's profits in the UK are capped at around 2% just like all of the other retailers in the UK.

EDF could sell their energy anywhere in the world and make the same profits, maybe even more.

Just look at Shell, they have just sold their loss making UK energy retailer.

You need to look at how UK retailers are restricted in how they buy energy, even if it is from their own parent company.

The profits go to the international generation and extraction companies, not the UK retailers.

QrizB

peter021072 said:

A tale of two graphs. The first is the share price of Centrica (an UK energy supplier through British Gas)

Impressive, isn't it?

I've just checked my SSISA. I paid just under 40p for my Centrica shares. I should've bought more!

peter021072 said:

Incidentally, the French successfully nationalised their supplier EDF and subsidised the prices, benefitting the less well off at the cost of shareholders. However EDF is a British supplier as well, so they reap the benefit of our higher energy prices.

That's a bit misleading.

The French state already owned 84% of EDF; a nationalised industry in all-but-name. (It was entirelty state-owned until 2005, when 16% of it was sold.)

Buying the 16% of EDF that is privately owned is going to cost the French state 10 billion Euros.

EDF made an 18 billion Euro loss last year, losses borne largely by the French state.

matt_drummer

peter021072 said:

Incidentally, the French successfully nationalised their supplier EDF and subsidised the prices, benefitting the less well off at the cost of shareholders. However EDF is a British supplier as well, so they reap the benefit of our higher energy prices.

Where did the French government get the money from to nationalise EDF and subsidise the prices to benefit the less well off?

I don't know as I don't really care, but I assume it was from tax payers or was it all from shareholders?

We could use some taxpayers money to do the same but then we may not have so much to pay benefits and pensions.

Would you be happy if we used taxpayer funds earmarked for benefits and pensions to nationalise energy companies and benefit the less well off who will now be even less well off than they were before?

You can't have it all, subsidised utilities and subsidised incomes.

There is a limit somewhere and a balance has to be found.

Looking at high energy costs and looking for help is ok but they need to be considered in tandem with everything else.

Taxes are high and public services are stretched.

Our government has borrowed more than twice as much in the last thirteen years as we had borrowed in the whole of time before.

Everything is worse, there's no money left.

There are no rich people left to tax that will generate any significant amount of money.

How would you nationalise and subsidise energy for the less well off, where is the money coming from?