Energy bill help pushes UK borrowing to 30-year high

[Nearly Sane]

The article says that wholesale gas prices have gone down. They've collapsed from the peaks. The govt doesn't really have the courage to take effective action to control profiteering here so are caught in this position. Add to that the self inflicted wounds of a Brexit deal that was close to the worst possible, and the farce of the Truss weeks, and we see a govt that is simply reacting to what's happening with no plans, no ideas, no thought.


https://www.bbc.co.uk/news/business-64380291

[jeremyp]

The article says that wholesale gas prices have gone down. They've collapsed from the peaks. The govt doesn't really have the courage to take effective action to control profiteering here so are caught in this position. Add to that the self inflicted wounds of a Brexit deal that was close to the worst possible, and the farce of the Truss weeks, and we see a govt that is simply reacting to what's happening with no plans, no ideas, no thought.


https://www.bbc.co.uk/news/business-64380291

The reason energy bills stay high when gas prices have gone down is that the companies who supply you with gas and electricity don't buy it on the spot market. They make contracts to supply gas months months in advance.

Furthermore, there is no profiteering, at least not by the company you pay your bill to. More or Less did a segment on this a few months ago and discovered that the retail suppliers have pretty small margins. I think it was about £4 out of a bill of say £300.

[Nearly Sane]

The reason energy bills stay high when gas prices have gone down is that the companies who supply you with gas and electricity don't buy it on the spot market. They make contracts to supply gas months months in advance.

Furthermore, there is no profiteering, at least not by the company you pay your bill to. More or Less did a segment on this a few months ago and discovered that the retail suppliers have pretty small margins. I think it was about £4 out of a bill of say £300.

So why did the bills go up immediately the spot prices went up?

[jeremyp]

So why did the bills go up immediately the spot prices went up?

Prices had been going up for quite a while.  It's a mistake to assume that the last price hike was due to the price of gas on the day they did it, even if it feeds a narrative that you like.

[Nearly Sane]

Prices had been going up for quite a while.  It's a mistake to assume that the last price hike was due to the price of gas on the day they did it, even if it feeds a narrative that you like.

The prices went up in the last rise because of the move in the ceiling. Prices started going up long before that. Producers have been making huge profits.

[jeremyp]

The prices went up in the last rise because of the move in the ceiling.

Which had to happen because the people who you pay bills to make a very small margin and if they can't avoid making a loss, they'll stop selling you electricity.

Prices started going up long before that. Producers have been making huge profits.

Understand that the producers are not the UK energy retail providers. They are the likes of BP and Shell. The product they sell is in high demand and therefore they make large profits. That's just economics.

[Nearly Sane]

Which had to happen because the people who you pay bills to make a very small margin and if they can't avoid making a loss, they'll stop selling you electricity.Understand that the producers are not the UK energy retail providers. They are the likes of BP and Shell. The product they sell is in high demand and therefore they make large profits. That's just economics.

And govts can do something about economics. This govt seem to have chosen the worst of all possible worlds.