British Gas - learning from the Banks?

[growse]

As I said, British Gas is learning from the Banks; after all, as your idol Cameron says, "We are all in this together"


More pointless ill-conceived drivel from the self-proclaimed oracle, Castiel

Oh the ironing.

*edit* as a BG shareholder, can I tell you where to shove it? BG making a profit means (rather indirectly) I get a half-decent pension.

 

[Dave M]

A lot of hyperbole from the usual suspects defending their entrenched positions.

I think there is a real issue to be addressed in that a supposedly competitive market posts increasing (indeed record) profits when it's margins are supposedly being squeezed (costs rising).

If they were truly competing for custom energy firms would abosrb as much of the cost rises as they could to defend their customer base and steal customers from other firms.

Seems it works with tins of beans but not utilities and banking. Odd. Could be related to the fact that no where in my electric bill does it tell me the price of one unit of electricity. I think there is definitley a case for regulation of the energy market and thus a question of what exactly ofgem is doing.

 

[growse]

A lot of hyperbole from the usual suspects defending their entrenched positions.

I think there is a real issue to be addressed in that a supposedly competitive market posts increasing (indeed record) profits when it's margins are supposedly being squeezed (costs rising).

If they were truly competing for custom energy firms would abosrb as much of the cost rises as they could to defend their customer base and steal customers from other firms.

Seems it works with tins of beans but not utilities and banking. Odd. Could be related to the fact that no where in my electric bill does it tell me the price of one unit of electricity. I think there is definitley a case for regulation of the energy market and thus a question of what exactly ofgem is doing.

Margins aren't just about raw material cost. There's other costs you can take out of the business that can more than offset a rising raw materials costs...

 

[Mr Jack]

The problem with the privatised gas companies is that it's a pseudo-market. The fact is that the exact same gas will come up your pipe regardless of the name of company you're supposedly being supplied by. Complicated administration then works out how much gas the company "owes" the system, which they then buy from the wholesale markets. But since none of the gas companies are actually involved in producing the gas they sell, and lack sufficient purchasing power to have any influence over the prices, all this setup does is add complexity (and thus cost) to the system. While the costs of advertising, extra customer service costs and the cost of paying shareholders all drive up the costs further.

It's a stupid setup, with neither the benefits of a proper market, nor the benefits of a nationalised monopoly.

But blaming British Gas for it is daft.

 

[Floogie]

You can change suppliers. You can't do that when the council decides to spend 25% of council tax on inflated pensions, or when the NHS gives you MRSA...

Er, 4-5% of council tax on pensions. Stop trying to deceive people. Thanks.

 

[alx]

The problem with the privatised gas companies is that it's a pseudo-market. The fact is that the exact same gas will come up your pipe regardless of the name of company you're supposedly being supplied by. Complicated administration then works out how much gas the company "owes" the system, which they then buy from the wholesale markets. But since none of the gas companies are actually involved in producing the gas they sell, and lack sufficient purchasing power to have any influence over the prices, all this setup does is add complexity (and thus cost) to the system. While the costs of advertising, extra customer service costs and the cost of paying shareholders all drive up the costs further.

It's a stupid setup, with neither the benefits of a proper market, nor the benefits of a nationalised monopoly.

But blaming British Gas for it is daft.

Sorry but this is wrong.

British Gas owners Centrica have various joint assets and ventures in the North Sea, including various rigs etc. Centrica upstream is fairly new but it's growing and expanding quite quickly.

 

[Mr Jack]

British Gas owners Centrica have various joint assets and ventures in the North Sea, including various rigs etc. Centrica upstream is fairly new but it's growing and expanding quite quickly.

British Gas, however, buys the gas it sells us on the wholesale market. The same happens with Shell forecourts and Shell the producer. Shell forecourts actually pay more for their fuel than supermarkets do.

 

[drunkenmaster]

Incoming, a thread of irrational lefty-rage!

I mean, it isn't like they have expanded their customer base and diversified their product range or anything... No, it's all about the price rises...

lefty rage indeed, they made more than me, must hate, ignore what their tax pays for, get all happy when Labour say they'll make them bleed, cry years later when the bleeding leads to worse prices.

Like anyone cares about their customer base or the diversity of their product range. It's about how much that bill is that comes through the door.

Yes, because British gas pay no taxes or anything, at all, so of course a company doing well, that can afford to employ new people, and expand, is bad for the UK.

No, big companies doing well pays for your education, your health care, your roads, your government, your social, etc, etc, etc.

People hate when big companies do well, complain about it, Labour start promising to screw them over, idiots vote for them, Labour screws them over, jobs are lost, companies go bust, rich companies outsource and move to other countries, and you end up paying more tax than you saved on your energy bill, then as that energy company does less and less well, they raise prices anyway.

So you're MASSIVELY WORSE OFF than when you started, because people are utterly, utterly, utterly blind to the long term consequences of anything.

British gas and many other energy companies sell to OTHER COUNTRIES and make profit in ways other than directly charging british people.

They do it well so you want to punish them, then long term, screw us all completely.

 

[Castiel]

As I said, British Gas is learning from the Banks; after all, as your idol Cameron says, "We are all in this together"


More pointless ill-conceived drivel from the self-proclaimed oracle, Castiel

My idol Cameron, hardly, I am not politically motivated enough to care that much.

However attacking a company simply because it is successful is drivel, profit making British based companies pay taxes, employ millions of people and drive the economy.

You want to stop that!

You're insane.

 

[alx]

British Gas, however, buys the gas it sells us on the wholesale market. The same happens with Shell forecourts and Shell the producer. Shell forecourts actually pay more for their fuel than supermarkets do.

Yes, that is true - sorry I prob went a little OTT with my response.

Why would Shell forecourts pay more then supermarket stations? Both normally get their petrol/diesel from the nearest refinery so should both pay the same.

That's not to say supermarkets couldn't import correct spec fuels for cheaper though.

 

[Darkman]

If you don't like it vote with your feet.

When BG had the best tariff we switched over. When they got greedy we left.

Simples.

 

[Mr Jack]

Why would Shell forecourts pay more then supermarket stations? Both normally get their petrol/diesel from the nearest refinery so should both pay the same.

The supermarkets, being a large scale buyer, negotiated a better deal. I don't know if it is still the case but certainly a few years back supermarkets were paying 1 or 2p less for a litre of fuel.

 

[scorza]

The supermarkets, being a large scale buyer, negotiated a better deal. I don't know if it is still the case but certainly a few years back supermarkets were paying 1 or 2p less for a litre of fuel.

Isn't supermarket fuel watered down with ethanol/snake-oil or somethin? Which is why it's cheaper. Wasn't this why a load of cars packed up after filing up as Tesco's a while back?

 

[[TW]Fox]

Isn't supermarket fuel watered down with ethanol/snake-oil or somethin? Which is why it's cheaper. Wasn't this why a load of cars packed up after filing up as Tesco's a while back?

Not this AGAIN.

 

[Pudney]

A lot of hyperbole from the usual suspects defending their entrenched positions.

I think there is a real issue to be addressed in that a supposedly competitive market posts increasing (indeed record) profits when it's margins are supposedly being squeezed (costs rising).

If they were truly competing for custom energy firms would abosrb as much of the cost rises as they could to defend their customer base and steal customers from other firms.

Seems it works with tins of beans but not utilities and banking. Odd. Could be related to the fact that no where in my electric bill does it tell me the price of one unit of electricity. I think there is definitley a case for regulation of the energy market and thus a question of what exactly ofgem is doing.

Out of interest have you looked at the underlying numbers or just going off the headlines?

 

[Wicksta]

Not this AGAIN.

It's one of those perpetuating internet myths spread by people who can't even be bothered to use Google.

 

[Dave M]

Out of interest have you looked at the underlying numbers or just going off the headlines?

Neither, I'm firmly in the apathy camp, you'll all end up here eventually. I pay my bill and get on with my life. Which brand of butter I buy has more effect on my lifestyle than which energy firm is fleecing me this month.

It just gets boring seeing the same people make the same argument which they twist to form some tenuous link to the OP.

 

[BlackDragon]

My initial reaction was outrage too, but if you read the article:

The news comes two months after the UK utility announced a 7% rise in domestic energy bills, which it blamed on rising wholesale prices.

Some 85% of British Gas's profit came in the first half of last year, according to a Centrica spokesperson, when customers increased energy usage in response to cold weather, and the firm attracted new business with a price cut in February.

The second half was less profitable for the group's residential energy unit as wholesale prices rose more quickly.

So if I have interpreted the article right:

• They only increased prices a couple of months back
• Most of the profit was made in the first half of last year
• They had to hike the price in the 2nd half of the year due to energy costs to them

So they aren't making a huge profit as a result of the price hike, as the title/OP might have you believe.

 

[alx]

The supermarkets, being a large scale buyer, negotiated a better deal. I don't know if it is still the case but certainly a few years back supermarkets were paying 1 or 2p less for a litre of fuel.

Yeah that makes sense, I worked at a refinery for a while as an engineer but wasn't really involved with specific pricing so it could well be true.

 

[stockhausen]

... So they aren't making a huge profit as a result of the price hike, as the title/OP might have you believe.

Yo mean that with the 7% price hike in the 2nd half of the year and the veryu cold weather this winter and the resulting higher than expected usage, they will make an even larger profit next year?


As I said earlier, British Gas is learning from the Banks.

To summarise Cameron, "Some of us are in this together"