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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 10th Jan 12, 4:17 PM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: Huge energy price cuts 'unlikely'
    • #1
    • 10th Jan 12, 4:17 PM
    MSE News: Huge energy price cuts 'unlikely' 10th Jan 12 at 4:17 PM
    This is the discussion thread for the following MSE News Story:

    "Households have been warned not to expect huge price falls if the big six energy firms cut costs ..."

Page 1
    • undaunted
    • By undaunted 10th Jan 12, 4:32 PM
    • 1,862 Posts
    • 964 Thanks
    undaunted
    • #2
    • 10th Jan 12, 4:32 PM
    • #2
    • 10th Jan 12, 4:32 PM
    This seems like a none story rather than a news item to me!

    I note that it suggests suppliers will have bought their energy some time ago for use in the coming months.

    Following this logic they will presumably also be buying today whilst prices are low for future use & at some future date we will see the benefits of these lower wholesale costs?

    Or is the truth that they are just a greedy set & we have more chance of seeing a flying pig than lower costs being passed on?

    Perhaps "call me Dave" had better arrange another of his wonderful summits?
    • Consumerist
    • By Consumerist 10th Jan 12, 4:38 PM
    • 5,202 Posts
    • 2,602 Thanks
    Consumerist
    • #3
    • 10th Jan 12, 4:38 PM
    • #3
    • 10th Jan 12, 4:38 PM
    It seems to me that not many consumers will be able to immediately benefit from any price reductions due to the year-long contracts imposed on them even for variable-rate tariffs.

    It is unlikely that energy companies will actually reduce current tariffs but instead they are likely to generate new cheaper tariffs which most of their current customers won't be able to switch to because of these so-called "innovative" tariff contracts (Ofgem's description, not mine).

    The energy companies are just running rings round Ofgem and consumers alike.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • HalloweenJack
    • By HalloweenJack 10th Jan 12, 5:09 PM
    • 614 Posts
    • 205 Thanks
    HalloweenJack
    • #4
    • 10th Jan 12, 5:09 PM
    • #4
    • 10th Jan 12, 5:09 PM
    energy companies complain when prices go up (be aware 2 of the wholesalers are the companies in the uk as well) - so prices have to increase staright away - but when they drop MASSIVELY they complain they have to forward buy contracts


    utter !!!!!!!!/
    • Lube
    • By Lube 10th Jan 12, 5:24 PM
    • 995 Posts
    • 911 Thanks
    Lube
    • #5
    • 10th Jan 12, 5:24 PM
    • #5
    • 10th Jan 12, 5:24 PM
    Prices tend to drop when demand is getting lower too
    • Totality
    • By Totality 10th Jan 12, 5:35 PM
    • 1,799 Posts
    • 5,564 Thanks
    Totality
    • #6
    • 10th Jan 12, 5:35 PM
    • #6
    • 10th Jan 12, 5:35 PM
    Aren't the vast majority locked in to tariffs now anyway, which would mean not benefitting from any cuts?
    • bloss0m
    • By bloss0m 10th Jan 12, 5:38 PM
    • 974 Posts
    • 1,129 Thanks
    bloss0m
    • #7
    • 10th Jan 12, 5:38 PM
    • #7
    • 10th Jan 12, 5:38 PM
    Well some will thats the risk you take but ultimately prices will creep up again in the not too distant future. Even with price cuts which may not be much, prices have still risen in real terms in past 12 months

    Aren't the vast majority locked in to tariffs now anyway, which would mean not benefitting from any cuts?
    Originally posted by Totality
    • robin58
    • By robin58 10th Jan 12, 7:23 PM
    • 2,705 Posts
    • 3,269 Thanks
    robin58
    • #8
    • 10th Jan 12, 7:23 PM
    • #8
    • 10th Jan 12, 7:23 PM
    Just means it will be a little longer before they announce further prices changes BUT it will be in the upwards direction. (cynic, me - no! )
    The more I live, the more I learn.
    The more I learn, the more I grow.
    The more I grow, the more I see.
    The more I see, the more I know.
    The more I know, the more I see,
    How little I know.!!
    • Pincher
    • By Pincher 10th Jan 12, 10:33 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    • #9
    • 10th Jan 12, 10:33 PM
    • #9
    • 10th Jan 12, 10:33 PM
    Just give me 26.7% discount fixed until 1st April 2013.
    They can keep the standard tariff high for show, I don't care.
    • Pont
    • By Pont 10th Jan 12, 10:42 PM
    • 1,419 Posts
    • 1,493 Thanks
    Pont
    My understanding is that due to relatively mild winter, compared to the last 2 very cold, they've all 'over bought'. Hopefully it will come back to bite their very greedy butts as they're stuck with energy that we're not using!
    • I luv cats
    • By I luv cats 11th Jan 12, 8:11 AM
    • 14,065 Posts
    • 72,008 Thanks
    I luv cats
    bhah bhah bhah - sheep
    http://www.bbc.co.uk/news/business-16501880

    EDF Energy to cut gas price by 5%
    • torbrex
    • By torbrex 11th Jan 12, 8:17 AM
    • 61,883 Posts
    • 124,626 Thanks
    torbrex
    EDF very conveniently anounce a drop of 5% in their gas prices as of February once the high usage period is almost over.

    No matter that the wholesale price has dropped by 22%
    • Paulgonnabedebtfree
    • By Paulgonnabedebtfree 11th Jan 12, 9:18 AM
    • 2,703 Posts
    • 28,940 Thanks
    Paulgonnabedebtfree
    "However, any decrease will be a token gesture rather than anything meaningful as suppliers will have bought the lion's share of their requirements for this winter and summer already and much of this will have been at higher prices than we are seeing today. Any price decrease will be welcome nonetheless."

    I have a token gesture for the energy companies too. I'm just not sure how many fingers to use.
    If Scottish Power do reduce, I will be watching like a hawk to check how they handle the more expensive, early units that went up 56% for gas in one jump.
    If they take the pee, I will be off - though the rest aren't any better.
    I can't decide if this situation is a cartel (illegal) or a quasi-cartel (immoral). To be a cartel I think they actually have to directly communicate with each other.

    A friend of mine has cut off his own gas (at the meter) and gone all electric. He wears a coat on the colder nights to avoid using heating. He uses a Berco boiler for hot water, never uses the bath except for showers and has a , a halogen oven and a microwave to supplement the main electric cooker. You might normally expect all electric to be more expensive but with the extortionate price of the early gas units, it is viable for him.
    When he switches in order to get his switching fee, he will still switch both fuels though. There's no rule to say that you have to use the gas supply. It also avoids the need to get the gas boiler serviced and checked.
    • Pincher
    • By Pincher 11th Jan 12, 9:30 AM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    "The company did not announce any cut to the price of its electricity bills, which rose by 4.5% in November."

    Only gas is down 5%, after peak winter usage.
    • Michael_Nottingham
    • By Michael_Nottingham 11th Jan 12, 6:23 PM
    • 268 Posts
    • 2,690 Thanks
    Michael_Nottingham
    Surely this article completely misses the point about the differences between small independent firms and the Big Six

    "Smaller firms tend to buy their power much closer to the time they sell it to us so can react quicker to wholesale falls."

    Small firms cannot either get the credit or afford to hedge their purchases forward a long time - so have to buy close to when they sell it, they don't have a choice.

    While this may favour them at times of the wholesale market is dropping, at times of rising prices, they will have to increase their prices first or take the profit hit.

    This is why you often see new companies joining the market as wholesale costs drop but often see casualties as wholesale costs increase
    • RHYSDAD
    • By RHYSDAD 11th Jan 12, 7:42 PM
    • 2,190 Posts
    • 2,946 Thanks
    RHYSDAD
    I'm just glad I got my woodburner going. Although it still needs feeding with fuel it's a darn sight cheaper than gas. We haven't needed the central heating since 14th December....
    "Do not use a hatchet to remove a fly from your friend's forehead."

    Chinese Proverb


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