Energy Prices (Strictly NO referrals!)

Alex_6n2 said:
energy supply and demand is a very complex GLOBAL picture
Click to expand...
thank you for a thorough writeup
Of course there are more factors in all of this.
Gas prices have been already getting high in 2021, causing the original problems with insufficient gas storage over 2021/22 winter. Which is rooted in a change in spot market gas price calculation iirc.
Of course after all the sanctions and political decisions (and mysterious explosions) those prices seem super low now.
 
dLockers said:
So they didn't make £1.12bn profit then? Or what?
Click to expand...

the section of the business that supplies energy to end customers lost £200m because they had to buy energy at rates above what they were allowed to sell it for under the price cap.

Don’t forget not all the energy they sell to customers is electricity, it also includes gas. Likewise they have to buy the electricity at arms length of the open market with other suppliers.
 
Last edited:
b0rn2sk8 said:
the section of the business that supplies energy to end customers lost £200m because they had to buy energy at rates above what they were allowed to sell it for under the price cap.

Don’t forget not all the energy they sell to customers is electricity, it also includes gas. Likewise they have to buy the electricity at arms length of the open market with other suppliers.
Click to expand...
And who did the consumer business buy the gas from? Lol.
 
It defo appears that Energy suppliers are getting the rough side of the deal right now. Both EDF and British Gas losing money through 2022, as energy retailers -> EDF £200m and BG minus £40m on 2021 profits.

-> Customers think they are making billions because 'prices are too high' and the way media are reporting profits from their umbrella energy producer businesses.
-> I feel sorry for the customer facing employees, who will be going through tough times, dealing with angry and uninformed customers on the phone.
 
jumped on the octopus variable for now... dropped from estimated 300ish month to 170ish so a good chunk. Obviously prices flactuate a lot with this so pros and cons. I've heard they've limited it to 50 new sign ups a day now. Wonder why..
 
dLockers said:
And who are the big players in the market?

Imagine if I owned Weatabix, and a large percentage of the wheat fields.
Click to expand...
Vertically integrated doesn’t create loyalty. The energy will be purchased from whoever on the market offers the best price/contract
 
SDK^ said:
Energy producers and suppliers don’t set the gas wholesale price .

-> The producers extract the gas and sell it at the market rates to the suppliers.
-> The suppliers sell it to us, plus 5% profit

Also, Centrica cannot sell the gas it extracts to its own company (British Gas) for a rate than is preferential to the one it charges other energy companies.
Click to expand...

If I started a bakery.

I was able to make a loaf of bread for 20p.

I then set up a separate retailer to sell the bread to consumers.

My retailer purchased the bread from my bakery at £1 a loaf and sold it for £1.05.

Would you consider that ok? Only 5% profit right?

Regulator hits my retailer, as its the retailer that deals with consumers, its all good my margins are low, maybe someone sues me, and I dont have the margins to survive so I wind up the retailer and make a new rebranded one selling the same bread, but all the equipment is owned by the bakery, so when bailiffs turn up there is nothing to seize. No worries, just the modern way of doing business.
 
Last edited:
chrcoluk said:
If I started a bakery.

I was able to make a loaf of bread for 20p.

I then set up a separate retailer to sell the bread to consumers.

My retailer purchased the bread from my bakery at £1 a loaf and sold it for £1.05.

Would you consider that ok? Only 5% profit right?
Click to expand...

Read : From my post you quoted:
Energy producers and suppliers don’t set the gas wholesale price .
Click to expand...

In your example : You are setting the price of the bread you are selling to the retailer - The energy producers aren't, it's set by the market! [and it's the same for all 'bakeries']
 
Last edited:
SDK^ said:
Read : From my post you quoted:


In your example : You are setting the price of the bread you are selling to the retailer - The energy producers aren't, it's set by the market! [and it's the same for all 'bakeries']
Click to expand...
"Set by the market" is such a cheap excuse.

In high demand a seller can choose to sell for less. Set by the market becomes valid when your principle is "sell for high as you can get".

Now if the market is regulated forcing the cheaper producers to sell for the same price as the most expensive, then yeah, but in a free open market, no one has a gun to the sellers head saying you must maximise your profits.
 
chrcoluk said:
"Set by the market" is such a cheap excuse.

In high demand a seller can choose to sell for less. Set by the market becomes valid when your principle is "sell for high as you can get".

Now if the market is regulated forcing the cheaper producers to sell for the same price as the most expensive, then yeah, but in a free open market, no one has a gun to the sellers head saying you must maximise your profits.
Click to expand...
“Can choose to sell for less”

  1. They are legally required to carry out business decisions, in the best interests of the shareholders.[it’s the same for all business with shareholders]
  2. It’s a business at the end of day - they will sell their products for as high as price a possible
  3. They are being taxed a high % on these profits.
  4. They are making big donations to charities and other support orgs.
 
Last edited:
I guess these energy companies must have made massive profits somewhere else entirely then. Maybe they own a bakery or something. Can't possibly be a correlation between high prices to consumers and their "other interests".
 
dLockers said:
I guess these energy companies must have made massive profits somewhere else entirely then. Maybe they own a bakery or something. Can't possibly be a correlation between high prices to consumers and their "other interests".
Click to expand...
That’s like a like an oil company making money on selling engine oil or trading energy and somehow that’s at the expense of uk utility customers
 
You must log in or register to reply here.
Back
Top Bottom