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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 8th Aug 11, 9:24 AM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: Wholesale gas prices at 'year low' as energy firms hike rates
    • #1
    • 8th Aug 11, 9:24 AM
    MSE News: Wholesale gas prices at 'year low' as energy firms hike rates 8th Aug 11 at 9:24 AM
    This is the discussion thread for the following MSE News Story:

    "Wholesale gas prices fell to their lowest level of the year on the day energy company Eon announced its latest hike ..."

Page 1
    • MillicentBystander
    • By MillicentBystander 8th Aug 11, 9:31 AM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    • #2
    • 8th Aug 11, 9:31 AM
    • #2
    • 8th Aug 11, 9:31 AM
    The energy companies will just say they bought the gas 6/12/18/24 months ago, whichever period of time when the wholesale costs were highest. They do seem to have a knack of buying high and selling high, don't they, lol? The saddest thing is I really don't think the energy companies actually care how high the wholesale costs are as they know they will just recoup it from the punters...plus most of them also have their own generating arm, I believe.
  • eurmalian
    • #3
    • 8th Aug 11, 9:34 AM
    • #3
    • 8th Aug 11, 9:34 AM
    I rather like the implicit suggestion in this article that rather than planing it all out for weeks/months, one of the executives just woke up that morning and went "Hey chaps, I fancy upping our prices a tad. What do you say? Shall I get on the blower to the papers?"
    Last edited by eurmalian; 08-08-2011 at 9:46 AM.
    I am an employee of British Gas, however the views expressed on this post are mine and do not necessarily reflect the views of Centrica, its subsidiaries or affiliated companies.
  • Dave_C
    • #4
    • 8th Aug 11, 10:56 AM
    • #4
    • 8th Aug 11, 10:56 AM
    I thought we had a regulator to look after the consumer's interests in these cases!

    Obviously not working, or perhaps a palm greased to turn a blind eye.

    Dave
    • MillicentBystander
    • By MillicentBystander 8th Aug 11, 11:10 AM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    • #5
    • 8th Aug 11, 11:10 AM
    • #5
    • 8th Aug 11, 11:10 AM
    I thought we had a regulator to look after the consumer's interests in these cases!

    Obviously not working, or perhaps a palm greased to turn a blind eye.

    Dave
    Originally posted by Dave_C

    There's a regulator?? Are you sure??
    • kar999
    • By kar999 8th Aug 11, 11:41 AM
    • 639 Posts
    • 247 Thanks
    kar999
    • #6
    • 8th Aug 11, 11:41 AM
    • #6
    • 8th Aug 11, 11:41 AM
    At least the Coop is transparant with it's policy. I didn't fix and switched to them so maybe... just maybe I might see a price reduction!

    When you sign up to Co-operative Energy, we buy your energy upfront for at least three months. So when costs rise, we don’t have to raise our prices immediately. Instead, we can give you plenty of notice and guarantee to keep your price unchanged for at least one month (we are aiming for three), to give you time to shop around if you want to. That’s part of our policy of openness, honesty and transparency. But when prices fall, we’ll pass the benefit on to you straight away.
    If the ball had gone in the net it would have been a goal.
    If my Auntie had been a man she'd have been my Uncle.
  • Dave_C
    • #7
    • 8th Aug 11, 12:11 PM
    • #7
    • 8th Aug 11, 12:11 PM
    There's a regulator?? Are you sure??
    Originally posted by MillicentBystander
    Yep, Ofgem! They have a website and everything to look cool!

    It's just a crying shame that they don't do what they were set up to do. The energy companies are bleeding us dry and Ofgem does NOTHING about it.

    Dave
    • Pincher
    • By Pincher 8th Aug 11, 1:15 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    • #8
    • 8th Aug 11, 1:15 PM
    • #8
    • 8th Aug 11, 1:15 PM
    Phew, about time.

    So evil energy supervillain Lex the Chief Exec saw energy prices both present and future sliding, and says:

    "Oh no, if this keep going, we will have to lower prices.
    We have to get the mentally subnormal customers to fix at high prices by scaring them with sky high rises. We'll delay lowering variable rate tariffs as late as possible, probably a week before an Ofgem enquiry."

    So, E.On energy traders will be buying futures contracts when they get low enough. The first set of these will become FixOnline 10.
    As the contracts get cheaper there will be better ~14 month Fixes.

    so I am expecting this switch schedule:

    1st September: FixOnline 10 comes out, do nothing, not cheap enough.

    13th September: Switch SaveOnline 8 to SaveOnline 9. Ride the cheaper variable rate.

    1st October: FixOnline 11 comes out, maybe worth it

    1st November: FixOnline 12. Dirt cheap one year fix. Ride it through winter 2011/12.
    • Consumerist
    • By Consumerist 8th Aug 11, 1:36 PM
    • 5,203 Posts
    • 2,604 Thanks
    Consumerist
    • #9
    • 8th Aug 11, 1:36 PM
    • #9
    • 8th Aug 11, 1:36 PM
    . . . and electricity prices sunk to their lowest point two days previously, at 45.2 megawatts per hour.
    Re-arranging this nonsense into something meaningful, one assumes that is supposed to mean 45.20 per megawatt-hour or, for the purpose of comparison with retail prices, the energy companies could be paying a spot price of 4.52p/kWh.

    This compares with around 10p/kWh charged by the energy companies. That's quite some mark-up.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • MillicentBystander
    • By MillicentBystander 8th Aug 11, 1:43 PM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    Re-arranging this nonsense into something meaningful, one assumes that is supposed to mean 45.20 per megawatt-hour or, for the purpose of comparison with retail prices, the energy companies could be paying a spot price of 4.52p/kWh.

    This compares with around 10p/kWh charged by the energy companies. That's quite some mark-up.
    Originally posted by Consumerist

    10p/kWh is the cheapest online rate you can get at the moment (and then only from those suppliers who have yet to put up their prices) so the vast majority of punters will be paying waaayyy over 10p/kWh.
  • ihateyes
    you gotta remember the 2 top men at the head of ofgem both get paid over 200K a year, and remember who actually pays these men their wages.... yip the energy companies!
    • davidgmmafan
    • By davidgmmafan 8th Aug 11, 5:20 PM
    • 1,446 Posts
    • 522 Thanks
    davidgmmafan
    Its funny because its true. Despite being pretty hopeless Ofgem will escape the cull of quangoes because its cheap as it is funded by the industry I believe.
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
    • Paulgonnabedebtfree
    • By Paulgonnabedebtfree 8th Aug 11, 5:59 PM
    • 2,703 Posts
    • 28,940 Thanks
    Paulgonnabedebtfree
    The energy companies may not have an official cartel but I believe that they are close enough to being a cartel to justify a criminal investigation.
    Although no-one has a crystal ball, my hunch has been for a while that the world economy will get a lot worse before it gets better. This usually means a lower oil price (unless there is a war in a major oil producing area). This is followed downwards by gas and electricity wholesale prices. The missing link is the greedy barsteward cartel in the UK that rips off all its customers.
    • TIMMY85
    • By TIMMY85 8th Aug 11, 10:07 PM
    • 169 Posts
    • 53 Thanks
    TIMMY85
    The energy companies may not have an official cartel but I believe that they are close enough to being a cartel to justify a criminal investigation.
    Although no-one has a crystal ball, my hunch has been for a while that the world economy will get a lot worse before it gets better. This usually means a lower oil price (unless there is a war in a major oil producing area). This is followed downwards by gas and electricity wholesale prices. The missing link is the greedy barsteward cartel in the UK that rips off all its customers.
    Originally posted by Paulgonnabedebtfree
    As I work for a supplier I will probably get ribbed for pointing out that as you are using future tense and suppositions about what may happen in future this can have no impact on current prices but if prices fall - that's good!
    • backfoot
    • By backfoot 8th Aug 11, 10:35 PM
    • 2,680 Posts
    • 2,215 Thanks
    backfoot
    Yep, Ofgem! They have a website and everything to look cool!

    It's just a crying shame that they don't do what they were set up to do. The energy companies are bleeding us dry and Ofgem does NOTHING about it.

    Dave
    Originally posted by Dave_C
    OFGEM.

    Official Guff and Empty Messages.

    Other Suggestions?
    • Pincher
    • By Pincher 8th Aug 11, 10:51 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    As I work for a supplier I will probably get ribbed for pointing out that as you are using future tense and suppositions about what may happen in future this can have no impact on current prices but if prices fall - that's good!
    Originally posted by TIMMY85
    All energy providers buy some of their energy using future contracts.
    That is how you can provide a fixed price tariff up to 18 months ahead without risk.

    The cumulative expectation and therefore price for the next 18 months averaged plus profit margin becomes a Fixed tariff like FixOnline 10.

    Breaking news that modifies that expectation translates into a lower average and then a lower fixed price tariff, say, FixOnline 11.

    Economic slow down => lower demand for oil => lower energy cost => cheaper fixed tariff next month.
    • Pincher
    • By Pincher 8th Aug 11, 11:01 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    OFGEM.

    Official Guff and Empty Messages.

    Other Suggestions?
    Originally posted by backfoot
    Obfuscating
    Front
    for
    Gas &
    Electricity
    Malpractitioners
    • backfoot
    • By backfoot 8th Aug 11, 11:05 PM
    • 2,680 Posts
    • 2,215 Thanks
    backfoot

    Breaking news that modifies that expectation translates into a lower average and then a lower fixed price tariff, say, FixOnline 11.

    Economic slow down => lower demand for oil => lower energy cost => cheaper fixed tariff next month.
    Originally posted by Pincher
    Such excellent logic has long departed the UK Energy Market.
    • MillicentBystander
    • By MillicentBystander 9th Aug 11, 8:27 AM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    Yes, I think the 'gas linked to the price of oil' theory went out as soon as oil started dropping from its then high of $147. This industry really does need sorting out but it will never happen - successive Govts have done what they can to NOT sort it out. You just have to look at the industry regulator and the 'powers' it's been given to realise that. Don't forget the Govt. cream off 5% from every household energy bill. It's a nice little earner for them, they certainly aren't looking to reduce that income by properly regulating the industry, are they?
    • Pincher
    • By Pincher 9th Aug 11, 9:33 AM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    Doctor Who idea:

    The Master has taken over the world, and Martha Jones got the people to think "Doctor".


    So, next time we have a really cold day, let Martin do a TV appeal, and we all focus our minds at the chief executives of each energy company. They put the picture of each CEO on TV in real time, and we all mentally say "lower, lower,....." repeatedly in our minds.
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