The supply of gas

[Harrowby Hall]

Perhaps someone will correct me if I am wrong, but my understyanding of this current problem is this:

There are just a few sources of the gas supplied which are used for domestic (and industrial) heating and cooking purposes. Once it is present in this country, there is a single national storage  system supplying a single nationwide network of delivery pipelines. Every gas user obtains a gas supply from this system.

However there are (or were) dozens of companies - large and small - whose whose business activity is to be a gas "supplier". They install a gas meter in each of the properties they "supply" and then the user obtains gas from the single national network. Apart from obtaining a periodic meter reading and issuing a bill for the quantity of gas used, the "supplier" plays no role in the obtaining and distribution of gas.

Apart from collecting money for a product with which they have no physical contact, do these companies provide any useful service? Is this business structure more effective and efficient than a single national company? How, except in the process of sending bills, is there any competition here?

[Sebastian Toe]

That's about it.
When you choose a gas supplier you are betting that their bets on the cost of gas ...when , how much and at what price they buy it at, along with their overheads, will give you a fair return i.e. your bill will be as low as possible.

[Udayana]

Given that the sourcing and distribution of the gas is more or less fixed the consumer price could also be fixed, the same for all or maybe taking other household factors into consideration (like council tax?).

The, so called, energy companies could just gamble against each other, with their own money rather than taking ours!

[Bramble]

The, so called, energy companies could just gambol against each other...

What a delightful image - and a pleasing way for them to expend their energy!

[Udayana]

What a delightful image - and a pleasing way for them to expend their energy!

Well it is a game ... 

[Nearly Sane]

All going well. Treasury telling the Business Secretary that he is lying.

https://www.bbc.co.uk/news/business-58830955

[jeremyp]

Given that the sourcing and distribution of the gas is more or less fixed the consumer price could also be fixed, the same for all or maybe taking other household factors into consideration (like council tax?).

The, so called, energy companies could just gamble against each other, with their own money rather than taking ours!

The price of gas isn't related to what it costs to produce, but what people are prepared to pay for it. Prices are high now because there is strong worldwide demand for a limited supply.

[Udayana]

The price of gas isn't related to what it costs to produce, but what people are prepared to pay for it. Prices are high now because there is strong worldwide demand for a limited supply.

Actually, that's a different issue to the organisation of competition in the UK market.

[jeremyp]

Actually, that's a different issue to the organisation of competition in the UK market.

No it isn't. UK suppliers have to buy their gas on the Worldwide market. If you artificially limit the price they can charge their customers, at some point, with rising prices, they start making a loss. At that point, the most sensible thing for them to do is stop selling gas.

[Udayana]

No it isn't. UK suppliers have to buy their gas on the Worldwide market. If you artificially limit the price they can charge their customers, at some point, with rising prices, they start making a loss. At that point, the most sensible thing for them to do is stop selling gas.

Of-course. The "fixed" or capped price in the UK must vary or be set according to the current or prevailing world market price and allow for some profit for the energy companies. Within the UK companies can compete on their efficiency of operation and their hedging tactics.