Topic: Fuel & energy prices

[Red-Soldier]

For what it is worth, Parliament has just passed into law the Energy (Oil and Gas) Profits Levy Act 2022 which is an effective super profits tax on Oil & Gas companies. Its limitation is that it has very generous investment allowance, so I suspect it won't raise as much as a simple levy would...

It includes a 97% tax break for all new fossil fuel investments 

Yet more doubling down on the fossil fuel nightmare!

When you have a government in the pocket of Big Oil, nothing will change.

[CowboyKangaroo]

It includes a 97% tax break for all new fossil fuel investments 

Yet more doubling down on the fossil fuel nightmare!

When you have a government in the pocket of Big Oil, nothing will change.

Sure its a incredibly anti-green bit of legislation, but the point isn't to discourage fossil fuels, its to discourage massive profits over the next few years (with the hope that the investment into new oil/gas reduces prices - which is the point of the thread, no?)

[Red-Soldier]

Sure its a incredibly anti-green bit of legislation, but the point isn't to discourage fossil fuels, its to discourage massive profits over the next few years (with the hope that the investment into new oil/gas reduces prices - which is the point of the thread, no?)

You're missing the main point here.  The over reliance on fossil fuels is the main reason why we're in this mess in the first place, so encouraging more fossil fuel extraction will just make the issue worse.

The new fossil fuels will go to the open market anyway, therefore having no positve impact on UK energy security.  Offering huge tax breaks to these companies is never the answer.

How about a windfall tax with no tax breaks, and extra investment in renewables.  Surely that would be better, no?

[CowboyKangaroo]

You're missing the main point here.  The over reliance on fossil fuels is the main reason why we're in this mess in the first place, so encouraging more fossil fuel extraction will just make the issue worse.

The new fossil fuels will go to the open market anyway, therefore having no positve impact on UK energy security.  Offering huge tax breaks to these companies is never the answer.

How about a windfall tax with no tax breaks, and extra investment in renewables.  Surely that would be better, no?

Bold is technically incorrect though as high investment would still increase supply domestically even if its effects are also global. Oil and gas still remains bloody difficult and expensive to move around the world - location still matters and infrastructure investment has always been key to ensuring persistent energy security (though perhaps you were being hyperbolic for effect - in which case, apologies for taking it literally). I'm not disagreeing that what you are suggesting would be perfectly good and reasonable strategies to pursue in the long run (or that there are better ways of implementing this) but for the Govt if your two issues are: oil/gas taking massive profits at a time when people can't pay their gas bills, and no incentive to increase the supply for domestic producers then this meets those goals. Its a short term policy with short term effects. Perhaps my point, is not that this is perfect (or even a good) policy in light of the bigger ecological picture, but that there is an irony in calling for a windfall tax when one has just been implemented.

An 80% investment relief is always eye-brow raising, but so are windfall taxes. It will likely stop the profits over the next three years.

[Red-Soldier]

Bold is technically incorrect though as high investment would still increase supply domestically even if its effects are also global. Oil and gas still remains bloody difficult and expensive to move around the world - location still matters and infrastructure investment has always been key to ensuring persistent energy security (though perhaps you were being hyperbolic for effect - in which case, apologies for taking it literally). I'm not disagreeing that what you are suggesting would be perfectly good and reasonable strategies to pursue in the long run (or that there are better ways of implementing this) but for the Govt if your two issues are: oil/gas taking massive profits at a time when people can't pay their gas bills, and no incentive to increase the supply for domestic producers then this meets those goals. Its a short term policy with short term effects. Perhaps my point, is not that this is perfect (or even a good) policy in light of the bigger ecological picture, but that there is an irony in calling for a windfall tax when one has just been implemented.

An 80% investment relief is always eye-brow raising, but so are windfall taxes. It will likely stop the profits over the next three years.

It's not hyperbole.  Any person not affiliated with the government or the fossil fuel industry will tell you that.  It gets sold on the open market, wherever that may be.

No irony, why give a 91% tax break away.......? Windfall tax good, tax break bad.

[Elmo!]

Red-Soldier is right on this, any increased production domestically isn't going to make a dint on prices.

It does have the added benefit of helping both the UK and Europe reduce dependence on Russian imports though.

[CowboyKangaroo]

It's not hyperbole.  Any person not affiliated with the government or the fossil fuel industry will tell you that.  It gets sold on the open market, wherever that may be.

No irony, why give a 91% tax break away.......? Windfall tax good, tax break bad.

The irony comment is not directed at you. Your position is not ironic and is certainly consistent.

Red-Soldier is right on this, any increased production domestically isn't going to make a dint on prices.

It does have the added benefit of helping both the UK and Europe reduce dependence on Russian imports though.

What effect do you believe that greater investment in domestic oil & gas infrastructure will have to the UK's energy security? To be honest I'm not hugely interested in being drawn into defending a policy which I do not support. It will do what it sets out to do which is to stop politically inexpedient massive profits in the short term and increase investment expenditure however.

[Elmo!]

What effect do you believe that greater investment in domestic oil & gas infrastructure will have to the UK's energy security? To be honest I'm not hugely interested in being drawn into defending a policy which I do not support. It will do what it sets out to do which is to stop politically inexpedient massive profits in the short term and increase investment expenditure however.

Common sense would dictate it would be good for energy security. Of course that doesn't necessarily mean it is the best way to improve energy security, and it also needs to be balanced against climate change effects. It comes down to whether you think reducing domestic production will actually reduce demand and therefore help climate change. As already said, it's not going to affect prices so I don't see why it would have any impact on demand.

[Red-Soldier]

UK petrol prices not falling in line with wholesale cost – RAC

Drivers are paying nearly £9 more for a tank of fuel than they should be, data shows

Petrol prices at the pumps are not falling fast enough and in line with wholesale price drops, according to the RAC.

Over the last eight weeks, the average price paid for unleaded by drivers across the UK has only dropped by 9p a litre– all of which came off in July – despite wholesale petrol prices falling by 20p in the same time period.

According to the motoring organisation, the wholesale cost of unleaded is now back to the prices reached in early May, meaning a litre should be 167p, not 183p. The disparity in cost from wholesale to consumer means drivers are paying nearly £9 more on a tank of petrol than they should be, it said. A tank of diesel should be lower than the end of July average, the RAC added.

“July has been an unnecessarily tough month for drivers due to the big four supermarkets’ unwillingness to cut their prices to a more a reasonable level, reflecting the consistent and significant reductions in the wholesale cost of petrol and diesel,” said the RAC fuel spokesperson, Simon Williams.

Williams added that it was independent retailers and not supermarkets that led the way for fairer prices across the country, which forced supermarkets to bring prices down.

“The best advice for filling up is no longer to assume the supermarkets are the cheapest, but to shop around as it’s highly likely you’ll find an independent retailer which is doing the right thing and fairly reflecting their lower wholesale costs by charging a lower price,” Williams said.

https://www.theguardian.com/money/2022/aug/03/uk-petrol-prices-cost-rac-unleaded

[Red-Soldier]

Big oil’s quarterly profits hit £50bn as UK braces for even higher energy bills

Labour condemns ‘eye-watering’ gains and renews call for windfall tax to ease pressure on household finances

Bumper profits of nearly £50bn shared by the world’s five biggest oil companies prompted a chorus of calls for higher taxes on the sector as UK households were told to brace for average annual energy bills of more than £3,600 this winter.

The UK firm BP was accused of “unfettered profiteering” after it said on Tuesday underlying profits had tripled to $8.5bn (£6.9bn) between April and June, thanks to high oil prices. It was its biggest quarterly profit in 14 years and BP said it would hand out nearly £4bn to shareholders as a result.

Prices have soared amid fears over supplies of energy caused in part by Russia’s invasion of Ukraine.

Oil companies in the UK and beyond have enjoyed booming earnings in recent months on the back of those rising energy prices as households around the world have struggled with soaring bills.

Rachel Reeves, Labour’s shadow chancellor, said the “eye-watering profits” showed that the government was “totally wrong” to have given significant tax breaks to oil companies.

A host of MPs from Labour, the Liberal Democrats and the Green party as well as environmental campaigners called for a higher windfall tax on oil companies.

The profits bonanza in the second quarter included a record $11.5bn profit for BP’s FTSE 100 rival Shell, record profits of $17.6bn and $11.6bn respectively for the US’s ExxonMobil and Chevron, plus $9.8bn for France’s Total. In the first six months of the year the companies made combined adjusted profits of nearly $100bn.

As Russia’s invasion grinds on, the research firm Cornwall Insight predicted the energy price cap on annual bills in Great Britain is on track to rise to £3,615 a year from January. That was an increase on its previous estimate of £3,363 made last month.

The cap, which is set quarterly by the energy industry regulator, Ofgem, was at £1,400 a year as recently as October last year. Cornwall predicts the cap will remain above £3,400 for the entirety of 2023, piling further pressure of household finances.

“People will be confounded by the latest profits announced by BP,” said Sharon Graham, the general secretary at the Unite union. “The British economy does not work for workers and their families. Britain’s real crisis isn’t rising prices it’s an epidemic of unfettered profiteering.”

Further energy price increases in the coming months will also put further pressure on the UK’s new prime minister, once Conservative party members choose between Truss and former chancellor Rishi Sunak by 5 September.

The BP chief executive, Bernard Looney, whose total pay in 2021 reached £4.5m, in February described BP as a “cash machine”, even before Russia’s invasion of Ukraine raised prices further. The company’s profit between April and June was its second highest in BP’s history, and rounded off a period that will be remembered as one of the most profitable quarters in the history of the oil industry.

The UK government in May belatedly responded to political pressure amid soaring energy prices with a £5bn windfall tax on oil companies’ “extraordinary profits”.

Reeves criticised the government for at the same time giving the oil companies 80% tax breaks for new investments, allowing them to reduce their tax bills by drilling for more oil. She said Labour would use extra cash from abolishing the tax breaks for a “green energy sprint” instead, as well as for more home insulation to cut energy use.

“People are worried sick about energy prices rising again in the autumn, but yet again we see eye-watering profits for oil and gas producers,” she said on Tuesday.

“Labour argued for months for a windfall tax on these companies to help bring bills down, but when the Tories finally U-turned they decided to hand billions of pounds back to producers in tax breaks. That is totally wrong.”

The environmental campaign groups Greenpeace and Friends of the Earth also called for a much stricter energy profits levy.

Doug Parr, the chief scientist for Greenpeace UK, said: “While households are being plunged into poverty with knock-on impacts for the whole economy, fossil fuel companies are laughing all the way to the bank. The government is failing the UK and the climate in its hour of need.

“Government must bring in a proper windfall tax on these monster profits and stop giving companies massive tax breaks on destructive new fossil fuel investments.”

Jacob Rees-Mogg, the government’s Brexit opportunities minister, told LBC radio: “I’m not in favour of windfall taxes. The energy industry is enormously cyclical. You need to have a profitable oil sector so it can invest in extracting energy.”

Looney acknowledged the difficulties faced by households on a call with analysts. Energy affordability is an “acute problem for many”, he said.

“We all have to recognise that it’s a very, very difficult place for people, not just in the UK but also around the world,” he said. “We understand that. We get it.”

But he also said BP’s oil and gas operation was “doing what it’s supposed to do: capture the upside from higher prices”. BP also said it had enjoyed massive growth in profit margins from its refineries, which make products such as petrol, diesel and jet fuel – all of which have contributed to rapid inflation in major economies.

Environmental groups said the windfall tax receipts should be invested in energy-saving measures such as insulation for homes in a move that would help to address the climate crisis as well as reducing dependence on despotic oil- and gas-producing regimes such as Russia.

A Treasury spokesperson declined to comment on individual taxpayers but said the £5bn energy profits levy would “help pay for our £37bn support package, which includes direct payments worth at least £1,200 each to the 8m most vulnerable families, a record fuel duty cut, and a national insurance cut worth up to £330 a year for the typical employee”.

https://www.theguardian.com/business/2022/aug/02/big-oil-profits-energy-bills-windfall-tax

[BarryCrocker]

It includes a 97% tax break for all new fossil fuel investments 

Yet more doubling down on the fossil fuel nightmare!

When you have a government in the pocket of Big Oil, nothing will change.

Wouldn't the idea of forcing BIg Oil to invest all super profits into renewables and not returned to investors and shareholders via buybacks.

[Elmo!]

It's worth noting that the super majors BP and Shell have reduced their operations in the UK a lot, most of their work is abroad these days.

The biggest oil producer in the UK is a company most of you have probably never heard of - Harbour Energy, formerly known as Chrysaor.

[KillieRed]

£1.64 for unleaded at a(n ususually busy) garage i passed last night.

[rob1966]

£1.64 for unleaded at a(n ususually busy) garage i passed last night.

Was something like that at Costco the other night too.

To give an idea of cost of fuel in HGV's, I'm doing a run to Coventry tomorrow for work and then I'll likely go to Rugby, should do about 270 miles, I can average about 10mpg in the Scania, so reckon I'll use about 125 litres of diesel and that's a short run, I normally do over 400 miles on a Saturday. Based on the monthly fuel bill from 10 years ago that was on the notice board, we probably spend around £9-10 million a month on fuel now, the group fuel bill must be about £35-40 million a month. The company is switching to biodiesel and is trialing a hydrogen truck this year.

[thejbs]

30p difference in stations 60 miles apart. Crazy.

[Wabaloolah]

There can be no doubt that fossil fuel companies are absolute scum!


Shell posts £10bn quarterly profits as households struggle with bills

Oil company to give shareholders £6.5bn after benefiting from price surge following Ukraine invasion

https://www.theguardian.com/business/2022/jul/28/shell-posts-10bn-quarterly-profits-as-households-struggle-with-bills

the government should refuse to increase the price cap if the fuckers go bust, so be it. Nationalise them all and then can charge a fair price, rip off wankers. Of course the Tory scum will never do anything like that as they are essentially in bed with the energy/oil companies. Makes my blood boil

[Red-Soldier]

UK energy bills forecast to hit £4,266 a year from January

Government urged to announce more support for struggling households as Ofgem price cap expected to rise again

Pressure is mounting on the government to announce a fresh support package for struggling households as energy bills are now forecast to top £4,200 from January.

The consultancy Cornwall Insight said on Tuesday that it expected the energy price cap to reach £4,266 a year for the first three months of next year.

The consultancy forecasts that bills could hit £4,426 in the second quarter of next year before easing. Only a week ago Cornwall Insight predicted the energy price cap was on track to rise to £3,615 a year from January.

Cornwall Insight said rising wholesale prices and a revision of the methodology used by the regulator Ofgem to calculate the price cap were behind the increase in its forecasts.

The consultancy’s principal consultant, Dr Craig Lowrey, said: “It is essential that the government use our predictions to spur on a review of the support package being offered to consumers.”

The consultancy now expects the cap to hit £3,582 from October, an increase of £200 on its last forecast. It expects bills to begin easing next summer, to £3,810 in the third quarter and then £3,781 in the final three months of next year.

The cap, which is set quarterly by the energy industry regulator, Ofgem, was at £1,400 a year as recently as October last year.

The former chancellor Rishi Sunak announced a £15bn support package for consumers in May, including £400 for every household. However, rising wholesale prices have since threatened to wipe out the impact of that support and Sunak and his Tory leadership rival, Liz Truss, are under pressure to announce further measures.

Lowrey said: “If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now.

“The government must make introducing more support over the first two quarters of 2023 a number one priority. In the longer term, a social tariff or other support mechanism to target support at the most vulnerable in society are options that we at Cornwall Insight have proposed previously. Right now, the current price cap is not working for consumers, suppliers, or the economy.”

Ofgem is planing to adapt the formula used to calculate the price cap in October in an effort to allow suppliers to better manage the risk from volatile wholesale prices and prevent higher prices for consumers as a result of suppliers going bust.

The regulator is attempting to prevent a repeat of events last year, when nearly 30 suppliers collapsed, in part due to a rise in wholesale energy prices.

Lowrey said the change in the formula had led to an increase in its predictions. However, he said the move would protect suppliers struggling with costs and prevent the cost of their collapses being added to consumers’ bills.

https://www.redandwhitekop.com/forum/index.php?action=post;topic=352781.0;last_msg=18442695

[Wabaloolah]

Looks like £3800 as an estimate was an underestimation, Now forecasting £4400 in January. I mean that's £350 a month for something that's essentially like heating your home and cooking food!

[Wabaloolah]

UK energy bills forecast to hit £4,266 a year from January

Government urged to announce more support for struggling households as Ofgem price cap expected to rise again
https://www.redandwhitekop.com/forum/index.php?action=post;topic=352781.0;last_msg=18442695

it's criminal

[Red-Soldier]

it's criminal

It is.

Some people are making an absolute killing out of this!

[Spezialo]

£1.58 in Costco this morning

[redbyrdz]

the government should refuse to increase the price cap if the fuckers go bust, so be it. Nationalise them all and then can charge a fair price, rip off wankers. Of course the Tory scum will never do anything like that as they are essentially in bed with the energy/oil companies. Makes my blood boil

Think you're mixing two types of companies up, the oil/gas companies that extract the stuff, and the energie suppliers that distribute (a much refined) product to your home.

[reddebs]

£1.78 for diesel at Asda today.  That's the cheapest it's been for months.

[gazzalfc]

UK energy bills forecast to hit £4,266 a year from January

Government urged to announce more support for struggling households as Ofgem price cap expected to rise again
https://www.redandwhitekop.com/forum/index.php?action=post;topic=352781.0;last_msg=18442695

Universal credit for a person over 25 is £4020 a year...

I can see why the payment strike is gathering pace

[TepidT2O]

Universal credit for a person over 25 is £4020 a year...

I can see why the payment strike is gathering pace

What other choice will people have?

[thaddeus]

What other choice will people have?

Precisely.  The thinly veiled threats of going out and installing pre-payment meters ring a bit hollow when you think of how many hundreds of thousands they may need to fit.

I'm still expecting whoever is the new PM to announce further universal support.  Partly because it's the right thing to do but more-so because it will give them a poll boost and a bit of momentum heading into the winter.

[Elmo!]

Precisely.  The thinly veiled threats of going out and installing pre-payment meters ring a bit hollow when you think of how many hundreds of thousands they may need to fit.

I'm still expecting whoever is the new PM to announce further universal support.  Partly because it's the right thing to do but more-so because it will give them a poll boost and a bit of momentum heading into the winter.

Smart meters can be changed to pre-payment remotely though.

[Red46]

Precisely.  The thinly veiled threats of going out and installing pre-payment meters ring a bit hollow when you think of how many hundreds of thousands they may need to fit.

I'm still expecting whoever is the new PM to announce further universal support.  Partly because it's the right thing to do but more-so because it will give them a poll boost and a bit of momentum heading into the winter.

Instead of using public money to essentially subsidise the profiteering of energy companies we need the government to put some sort of cap on what the robbing b@stards can charge.
It’s a similar principle to low wages, firms don’t pay people a living wage so the tax payer steps in via benefits essentially subsidising low pay.

[So… Howard Philips]

Instead of using public money to essentially subsidise the profiteering of energy companies we need the government to put some sort of cap on what the robbing b@stards can charge.
It’s a similar principle to low wages, firms don’t pay people a living wage so the tax payer steps in via benefits essentially subsidising low pay.

There is a cap, which seems to be increasing on a daily basis.

[reddebs]

There is a cap, which seems to be increasing on a daily basis.

Yeah imagine how much the robbing bastards would be charging us if it hadn't been capped!

[So… Howard Philips]

Yeah imagine how much the robbing bastards would be charging us if it hadn't been capped!

I’m not sure if this solely a road fuel thread or includes domestic fuel as well.

Anyway - a shower of robbing bastards.

[TepidT2O]

We need action to reduce fuel bills, we are talking 10s of billions.  Yet bizarrely there is still discussion of tax cuts

[thaddeus]

We need action to reduce fuel bills, we are talking 10s of billions.  Yet bizarrely there is still discussion of tax cuts

I expect the country will loosely fall into three camps; those who can't afford to live this winter, those who can and recognise the need to help, and those who can and don't want to help.  The Tory leadership hopefuls know they will be elected by the final category so that's who they're trying to appeal to.

The notion of the government reducing its income from taxes in the current climate is madness.  Even if you subscribe to the theory that lower tax rates equates to higher tax income in the long-term (I don't...) surely the focus needs to be on getting people through this winter.

[Wabaloolah]

Think you're mixing two types of companies up, the oil/gas companies that extract the stuff, and the energie suppliers that distribute (a much refined) product to your home.

bring all of it under public control, but particularly the energy suppliers, it's ridiculous and always has been that companies are allowed to profiteer on what people can't live with out.

Reduce the price cap back to what it was this time last year and pick up the pieces when they all go out of business.


The government can then subsidise the cost of energy at source

[Lee1-6Liv]

I don't understand the price cap, why does it keep on increasing and why doesn't the regulator cap it like before.

[reddebs]

I don't understand the price cap, why does it keep on increasing and why doesn't the regulator cap it like before.

Because they were all going bust due to selling it for less than they bought it.

[Elmo!]

I don't understand the price cap, why does it keep on increasing and why doesn't the regulator cap it like before.

It is calculated using a formula based on wholesale prices during the preceding months. What we are seeing in the news is projections based on the wholesale price, that's why we keep seeing changing figures.

[Wabaloolah]

Because they were all going bust due to selling it for less than they bought it.

good let them go bust

[reddebs]

good let them go bust

For some reason the government shit the bed and threw them a lifeline that we're all now paying for through an increase in the standing charge.

[Elmo!]

I'm not one for defending the Tories.... but to be clear, they let all the companies go bust, apart from Bulb, who were basically deemed too big to fail, none of the other providers would be able to take all their customers on like happened with all the other providers. The increase in the standing charge is, as I understand it, to cover costs associated with letting those companies going bust, rather than throwing a lifeling to Bulb.