MSE News: Explain your prices, Ofgem tells big six energy giants

in Energy
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Ofgem said suppliers' failure to engage with consumers on wholesale prices rises is undermining public confidence ...
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Explain your prices, Ofgem tells big six energy giants
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  • Just nationalize the bloody thing. Privatized it just doesn't work :P
  • shadowspy24shadowspy24 Forumite
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    It's actually pretty simple really, I'm surprised ofgem haven't figured out their business model:

    Wholesale prices increase => "We have to increase prices as wholesale costs have gone up and we can't absorb the price rises any more" => Prices go up by 10-20% 2 weeks later.

    Wholesale prices decrease => Nothing happens => 6 months later "Wholesale prices are only a small part of the cost of supplying gas/electricity and other factor have to be taken into account. Also we bought 6 years worth of gas/electricity at the high price to stabilise prices so we'll pass on the cuts once that has been used up" => Prices go down by 1% Six months later and only one utility.
  • It's actually pretty simple really, I'm surprised ofgem haven't figured out their business model:

    Wholesale prices increase => "We have to increase prices as wholesale costs have gone up and we can't absorb the price rises any more" => Prices go up by 10-20% 2 weeks later.

    Wholesale prices decrease => Nothing happens => 6 months later "Wholesale prices are only a small part of the cost of supplying gas/electricity and other factor have to be taken into account. Also we bought 6 years worth of gas/electricity at the high price to stabilise prices so we'll pass on the cuts once that has been used up" => Prices go down by 1% Six months later and only one utility.

    What are you blithering on about? Prices go down by 1%? Huh?
  • insaneglossinsanegloss Forumite
    121 Posts
    This is simply OFGEM wanting to look like they are doing something. Nothing more.

    They're own report actually broadly explains why bills haven't come down.

    https://www.ofgem.gov.uk/gas/retail-market/monitoring-data-and-statistics/understanding-energy-prices-great-britain/supply-market-indicator

    Essentially the huge figures reported in the media are next to meaningless. It refers to the spot price for next day delivery, whilst demand is low (it's summer!) And storage is already pretty much full. Hence no one can take advantage of such prices.
    Ex BG complaints veteran of 6 years!
  • minislimminislim Forumite
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    the big six are clearly up to something.
    as whenever i do a price comparison of all the energy companies none of them ever are at the top of the lists.

    the regulator and government needs to something about them. and soon.
  • PincherPincher
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    We should have bought Russia for a song when they were going bankrupt, like America did with Alaska. They get a European passport and democracy, we get cheap gas. We could be selling the oil and gas to China now. Gordon Brown could have issued a special bond to raise the money. Use the Collateralised Debt Obligation model, sell them to banks, and let them sell these junk bonds to each other, and let them go bankrupt in 2008. Then buy the bonds back for pennies and cancel them. Instead of the oligarchs owning Russia, the British empire now owns it.
  • Andy_WSMAndy_WSM Forumite
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    If that's the best OFGEM can come up with, then sack the lot of them!

    The last time they opened their traps they forced bills to go up, by meddling with the number of tariff's on offer and forcing suppliers to charge daily standing charges.

    Waste of space. The energy companies can do as they please, make their share holders and directors very happy and know that no one will stop them.
  • Ofgem's CEO, Dermot Nolan, explains why energy providers need to be more transparent about their prices...
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    Guest comment: 'You've got the right to buy energy at a fair price', Ofgem says
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  • They need to get the story they put out to consumers straight, not with some populist nonsense.

    Give us a figure that's based on trends on forward pricing taken into account various hedging strategies (to give a realistic range of wholesale pricing) with the best forecast of costs they have to get a true sense of if the companies are increasing their margins significantly. Also remember to include margins of error, otherwise the whole thing is meaningless.

    Surely it's simply stuff?!
    Ex BG complaints veteran of 6 years!
  • JC_DerbyJC_Derby Forumite
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    The big six will try and foist the blame onto the DNO's as they are currently an easy target, especially after the winter storms. Let's hope ofgem tell them, that doesn't wash.
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