Topic: Fuel & energy prices

[reddebs]

An element of that, sure, but their remit and powers are set by government.

And, as we know, successive governments since the 80's have sucked corporate cock. So bodies like Ofgem (Ofwat, Ofcom, etc) are deliberately neutered in what they can do.

Modern Britain is all about shysters making a huge amount of money off it's honest citizens .

Fixed that for you mate.

[Nobby Reserve]

Fixed that for you mate.

I accept the fix 

[Red-Soldier]

Don't worry, he BoE are going to raise interest rates again today, to help curb inflation 

[Nobby Reserve]

Don't worry, he BoE are going to raise interest rates again today, to help curb inflation 

Give the knobheads at the Fed have just raised theirs, the BoE is left with little option (alternative is not raise in response, then see the value of the £fall, making imports - including fuel - more expensive here)

Inflation is dropping in the US, due to the impact of the energy price shock last year now filtering out of the system, but they're being overly orthodox with their very blunt instrument.


Being on a tracker, this is financially slaughtering me. A 0.5% rise by the BoE will make my mortgage over £500/month more than 2 years ago.

[Fordy]

Don't worry, he BoE are going to raise interest rates again today, to help curb inflation 

They keep raising the rates but clearly it’s not working. Businesses will now just increase costs to cover any loses.

The banks are not in control of how companies operate costs and people will still spend because they have too.

[Nobby Reserve]

They keep raising the rates but clearly it’s not working. Businesses will now just increase costs to cover any loses.

The banks are not in control of how companies operate costs and people will still spend because they have too.

They're just reacting to the Fed

But yes, raising interest rates is an inflationary pressure in itself in these particular circumstances. People, already hit with rising costs everywhere, will be wanting higher pay rises to also cover soaring mortgage costs.

[rob1966]

Poor Shell, only £32 BILLION profits

https://www.unitetheunion.org/news-events/news/2023/february/shell-leading-way-on-corporate-profiteering/

[rafathegaffa83]

So we've had some companies switching smart meters to prepay remotely without telling customers. Now we have warrants being used to access peoples homes.

So what's the purpose of OFGEM then?

Like most regulatory or supervisory bodies, it's full of professional meeting attender careerists who are useless at doing what they are meant to do.

Compared to similar regulatory bodies globally, if there's one thing Ofgem is very good at it is handing down financial penalties for customer service failures and breaches of conditions. I think the generic review they will conduct about prepayment meters will likely uncover bad behaviour from more than just British Gas. Based on past proceedings, I'd imagine British Gas will be heavily fined. I wouldn't be surprised if there are also changes to how prepayment meters are deployed. Prepayment meters are supposed to be a last resort. However if that were the case there shouldn't be 7 million + installed in Britain

[Wabaloolah]

Just had my latest bill, our gas usage has dropped from 4100 kWh to 2800 kWh compared to the equivalent period August to January last year.

It's down to two factors I think, keeping the heating off where possible and not using the gas hob for around 3 or 4 of the months in question.

Looks like we've used around a third less gas this year compared to last when we were a bit more frivolous

[PaulF]

Can I ask, his did you reduce hob usage? Just eaten more cold foods?

[Wabaloolah]

Can I ask, his did you reduce hob usage? Just eaten more cold foods?

ours broke and we took ages to replace it, pretty much used a slow cooker as that has a hob facility and also used our air fryer and microwave.

Interestingly our electricity usage was pretty much identical to last year's use but obviously at a much greater cost

[PaulF]

Ah thanks Waballolah make sense.

[PaulF]

Are the current mega profits just being announced subject to the windfall taxes? or do they fall outside it?

[Elmo!]

Are the current mega profits just being announced subject to the windfall taxes? or do they fall outside it?

The profits announced are global. Only a small amount of BP and Shells money is made in the UK, which is what the windfall tax applies to.

[[new username under construction]]

The profits announced are global. Only a small amount of BP and Shells money is made in the UK, which is what the windfall tax applies to.

Sounds like Man City of the Electricity world

[sattapaartridge]

The profits announced are global. Only a small amount of BP and Shells money is made in the UK, which is what the windfall tax applies to.

Hmm, company is called British Petroleum, but all the money is made offshore? Strange. On my finance page, said that BP are giving a bumper share dividend soon.

[jonnypb]

BP profits: more than doubled to £23,000,000,000 in a year.

❌ Their climate target: missed.

📈 Our energy bills: doubled.

The same companies that are profiting from poverty are trashing our planet.

We need a proper windfall tax now + move to publicly owned green energy.

https://twitter.com/NadiaWhittomeMP/status/1622941183663083520?s=20&t=xqgm0GsvOgbgqLaT3eR35A

[Elmo!]

Hmm, company is called British Petroleum, but all the money is made offshore? Strange. On my finance page, said that BP are giving a bumper share dividend soon.

I'm not trying to defend BP here, but in this case, it literally is made abroad. It's not some offshoring scam.

Most of their oil and gas production is not in the UK.

[PaulF]

I should have thought of that before I asked. As I sort of knew that made heaps overseas.
I suspect they do shift things round to be as tax efficient as possible too.

[BarryCrocker]

More reasons to be angry.

Anger as British Gas owner’s profits triple to ‘monster’ £3.3bn
Figure comes amid calls for tougher windfall taxes and against backdrop of prepayment meter scandal

The profits of the scandal-hit owner of British Gas have more than tripled to a record £3.3bn, boosted by soaring wholesale gas prices after Russia’s invasion of Ukraine and as many households in Britain struggle with the cost of living.

Centrica’s “monster” profits immediately angered campaigners who are calling for tougher windfall taxes, lower bills and better treatment of vulnerable customers against the backdrop of the prepayment meter scandal.

The company’s profits for 2022 far outstrip the £948m made in 2021, aided by soaring profits in its North Sea oil and gas, and nuclear power divisions. They also surpass the company’s previous record profit of £2.7bn, in 2012.

The general secretary of the Unite union, Sharon Graham, said the profits were “obscene”. “These energy companies are showing us everything that is wrong with the UK’s broken economy,” she said.

The Trades Union Congress general secretary, Paul Nowak, called for public ownership of energy companies and said: “While millions of families struggle to heat their homes, firms like Centrica are raking in monster profits.”

Centrica cut its dividend to shareholders during the Covid pandemic but reinstated it last year, when it made an interim £59m payout. On Thursday, it said shareholders would receive a dividend this year worth more than £200m in total.

The company will spend a further £300m on buying back its own shares, on top of a previously announced £250m share buyback.

Centrica’s shares rose 5% on Thursday morning, making it the top riser on the FTSE 100.

British Gas faced widespread criticism earlier this month when it emerged that debt agents working for Britain’s largest energy supplier had ignored customers’ vulnerabilities and forced them on to prepayment meters to recover debts.

The company suspended the use of court warrants to install prepayment meters and all suppliers have been temporarily banned from the practice.

On Thursday, Centrica said it was “extremely disappointed by the allegations surrounding one of our third-party contractors.”

The chief executive, Chris O’Shea, is in line to land more than £3m in salary and bonuses through a pay package linked to Centrica’s financial performance, including an annual bonus of as much as £1.6m.

He waived a £1.1million annual bonus in 2021 and has been urged by campaigners to do the same again.

Centrica’s North Sea profits are subject to a windfall tax on North Sea oil and gas operators while it also has a 20% stake in Britain’s nuclear power stations, which are subject to the electricity generator levy implemented by the chancellor, Jeremy C*nt, to capture windfall gains.

However, Labour has called for the oil and gas windfall tax to be expanded to capture a greater proportion of profits.

Calls for the windfall tax on oil and gas companies have increased in recent weeks after oil majors including Britain’s BP and Shell posted record profits.

Labour has called for the scrapping of an investment allowance which cuts tax for oil and gas operators’ spending on increasing production.

Sana Yusuf, climate campaigner at Friends of the Earth, said the government “needs to step up and back growing calls for a tougher windfall tax on the excessive profits of fossil fuel companies like Centrica to help fund the investment in insulation and homegrown renewables needed to bring down bills and cut emissions”.

Centrica said its turnaround under O’Shea was “well advanced” and that it had £1.2bn of cash on its balance sheet, compared with debts of £4bn three years ago. However, the company did take a £2.4bn hit from the sudden fall in wholesale gas and power prices at the end of 2022.

Profits at British Gas’ energy supply arm fell 39% to £72m. In August the company announced it will donate 10% of profits from that division to help its poorer customers manage rising gas and electricity bills for the “duration of the energy crisis”.

The company said it had invested £200m in customer service, support and pricing as energy bills soared. “We are very aware of the difficult environment many customers are facing due to the high level of energy bills and wider inflationary impacts and we will continue to do what we can to support them,” Centrica said.

Customers have complained that too much of their money is being hoarded by energy suppliers. On Thursday Centrica, which has argued customer funds should be ringfenced, said it held £643m in customer deposits in a separate account.

https://www.theguardian.com/business/2023/feb/16/british-gas-owner-centrica-reports-record-profits-of-33bn

[reddebs]

Can anyone explain how they make their money?

If it's not selling to their "customers" what do they do? 

And yes I do realise that in the context of the statement their "customers" are not me and you but they must sell something to somebody which surely means they have "customers"?

[Nobby Reserve]

Can anyone explain how they make their money?

If it's not selling to their "customers" what do they do? 

And yes I do realise that in the context of the statement their "customers" are not me and you but they must sell something to somebody which surely means they have "customers"?

It has operations extracting gas and oil, plus it owns wind farms and has some shareholding in nuclear generation.

It's disingenuous for them/people to point to their subsidiary British Gas (the retailer that supplies homes) and say "It only made £8 per customer in profit over the whole year" because it's Centrica selling the gas to British Gas at the sky-high price in the fucking first place. As well as selling  at the high prices British Gas electricity that it has effectively generated itself.

The global energy market has become a commodified market. This is where a big part of the problem lies.

[BarryCrocker]

If British Gas is an energy and home services provider it needs to source it's product from wholesale markets. Now we all know that due to the conflict in the Ukraine prices have been very high. If British Gas passes on 100% of these increases to their clients shouldn't their profit remain the same assuming consumption hasn't gone up significantly.

[Elmo!]

Yeah the differentiation between domestic suppliers and producers is a lot more of a grey area with Centrica and Shell who are involved in both sides.

[Elmo!]

If British Gas is an energy and home services provider it needs to source it's product from wholesale markets. Now we all know that due to the conflict in the Ukraine prices have been very high. If British Gas passes on 100% of these increases to their clients shouldn't their profit remain the same assuming consumption hasn't gone up significantly.

A bit more complicated due to the energy price cap, meaning they might not have been able to pass on 100% of the costs (depends on their hedging). On the flip side though they will be coining it in from the production side of their business.

[Nobby Reserve]

If British Gas is an energy and home services provider it needs to source it's product from wholesale markets. Now we all know that due to the conflict in the Ukraine prices have been very high. If British Gas passes on 100% of these increases to their clients shouldn't their profit remain the same assuming consumption hasn't gone up significantly.

The company behind British Gas also has big stakes in that wholesale market (both gas and electricity)


View it like if potatoes were commodified. Due to, say, blight hitting potatoes in some major-producing countries, there's a global potato shortage and global wholesale market prices have soared.

A shop selling potatoes hikes its potato prices that it sells to the public, to reflect the higher wholesale potato price that it paid for its potatoes, in order to maintain its margins.

But the company that owns that shop also owns a huge potato farm who the shop buys its potatoes from. The farm has seen the global wholesale potato price soar and sells at that high wholesale price. To its own potato shop.

The potato shop only makes the same levels of profit.

But the potato farm makes mammoth profits from the higher global potato price.

The company that owns both is quids in.


As an irrelevant aside, I don't think I've ever typed 'potato' so often in a post.

[Red-Soldier]

Centrica boss refuses to say if he will waive bonus after ‘obscene’ £3.3bn profit

Chris O’Shea urged to ‘look at his conscience’ amid cost of living crisis and prepayment meter scandal

Centrica chief executive, Chris O’Shea, has refused to say whether he will waive a £1.6m bonus as the British Gas owner saw its annual profits triple to a record £3.3bn against the backdrop of the cost of living crisis.

The company’s “monster” profits angered campaigners who are calling for tougher windfall taxes, lower bills and better treatment of vulnerable customers against the backdrop of the prepayment meter scandal.

O’Shea could land a pay package of more than £3m including an annual bonus of as much as £1.6m. He refused to say whether he would repeat last year’s actions, when he waived a £1.1m bonus “given the hardships faced by our customers”. Centrica will also dish out about £750m in rewards for shareholders.

O’Shea said it was “too early to have a conversation” about his potential bonus payout despite pressure from campaigners to reject it. Details of his pay will be revealed in next month’s annual report.

Simon Francis of the End Fuel Poverty Coalition has called on O’Shea to “look at his conscience”, citing the number of customers forced on to prepayment meters by British Gas, as many households struggle with a big jump in energy bills.

The company’s earnings for 2022 far outstrip the £948m made in 2021, aided by soaring profits in its North Sea oil and gas, and nuclear power divisions linked to the war in Ukraine. They also surpass the company’s previous record profit of £2.7bn, in 2012.

The general secretary of the Unite union, Sharon Graham, said the profits were “obscene”. “These energy companies are showing us everything that is wrong with the UK’s broken economy,” she said.

The Trades Union Congress general secretary, Paul Nowak, called for public ownership of energy companies and said: “While millions of families struggle to heat their homes, firms like Centrica are raking in monster profits.”

Centrica cut its dividend to shareholders during the Covid pandemic but reinstated it last year, when it made an interim £59m payout. On Thursday, it said shareholders would receive a dividend this year worth more than £200m in total.

The company will spend a further £300m on buying back its own shares, on top of a previously announced £250m share buyback.

Centrica’s shares rose 5% on Thursday, making it the top riser on the FTSE 100 and helping to push the UK’s blue-chip share index to a new record high of 8,047.

British Gas faced widespread criticism earlier this month when it emerged that debt agents working for Britain’s largest energy supplier had ignored customers’ vulnerabilities and forced them on to prepayment meters to recover debts.

The revelations caused the company to suspend the use of court warrants to install prepayment meters and all suppliers have been temporarily banned from the practice.

On Thursday, Centrica said it was “extremely disappointed by the allegations surrounding one of our third-party contractors”.

Centrica’s North Sea profits are subject to a windfall tax on North Sea oil and gas operators. It also has a 20% stake in Britain’s nuclear power stations, which are subject to the electricity generator levy implemented by the chancellor, Jeremy C*nt, to capture windfall gains.

O’Shea said it would pay £1bn of tax for 2022 and he expects the group to pay £2.5bn in windfall taxes over their lifetime.

Labour has called for the oil and gas windfall tax to be expanded to capture a greater proportion of profits.

Calls for a larger windfall tax on oil and gas companies have increased in recent weeks after major firms, including Britain’s BP and Shell, posted record profits.

Profits at British Gas’s energy supply arm fell 39% to £72m. In August the company announced it would donate 10% of profits from that division to help its poorer customers manage rising gas and electricity bills for the “duration of the energy crisis”.

O’Shea said that the £75m Centrica had spent supporting British Gas household customers had surpassed the £72m profit made. Asked whether more of Centrica’s group profits should have been invested into helping households, O’Shea said: “If we were to invest profits from one part of our business that others couldn’t invest, I’m pretty sure that [rivals] would label this anti-competitive.”

O’Shea said “the solution to the affordability crisis” needed to be discussed with government and encompass concerns over the cost of food, rent and council tax too. “It has to start with society: what do we want to do and obviously that has to come through the government,” he said. Energy bills are expected to rise by 40% from April.

Centrica said it had invested £200m in customer service, support and pricing as energy bills soared.

https://www.theguardian.com/business/2023/feb/16/british-gas-owner-centrica-reports-record-profits-of-33bn

[PaulF]

Not sure it's 'fair' that the boss doesn't get his bonus. It's not exactly his fault that prices soared. Yes he's damn lucky , but he's not done much wrong there.
Maybe he could just agree to not aggressively avoid tax on the bonus

(Note. I am sure he had 'options' that would have lowered prices, but he'd have been voted out immediately.)

[Red-Soldier]

Not sure it's 'fair' that the boss doesn't get his bonus. It's not exactly his fault that prices soared. Yes he's damn lucky , but he's not done much wrong there.
Maybe he could just agree to not aggressively avoid tax on the bonus

(Note. I am sure he had 'options' that would have lowered prices, but he'd have been voted out immediately.)

 

[reddebs]

So they made massive profits by selling what they produce, gas and electric, to the companies who supply us. 

So they didn't need to charge the stupidly high prices that threw the markets right across the world into panic mode causing the suppliers everywhere to massively hike their prices up making world bank's panic into raising interest rates and blah di blah di fucking blah....

If they weren't FTSE thingied they'd be up in court on fraud and corruption charges.

Fucking wankers!!

[Nobby Reserve]

So they made massive profits by selling what they produce, gas and electric, to the companies who supply us. 

So they didn't need to charge the stupidly high prices that threw the markets right across the world into panic mode causing the suppliers everywhere to massively hike their prices up making world bank's panic into raising interest rates and blah di blah di fucking blah....

If they weren't FTSE thingied they'd be up in court on fraud and corruption charges.

Fucking wankers!!

Welcome to the world of commodities.

Energy and fuel are commodities traded on global markets. As you'd expect, the UK is fully signed-up to this principle. We also let private corporations 'own' the gas and oil they pump out of the seas surrounding the country, so we have little control over them or what they do with the gas/oil  (we levy a duty on what they produce)

We also have the [government-dictated] electricity pricing system whereby the price paid for ALL wholesale electricity produced is set by a stupid formula called the Marginal Generation Unit. The way the system is set up, for the vast majority of the time the price will match the cost of how much a unit of electricity costs to generate by gas power stations.

With gas prices being so high, it hikes the wholesale price to that point - even if the electricity is generated 'free' via wind or solar, or by coal or nuclear.


The entire thing is a racket set-up for shyster city-types to exploit.

[stewil007]

Not sure it's 'fair' that the boss doesn't get his bonus. It's not exactly his fault that prices soared. Yes he's damn lucky , but he's not done much wrong there.
Maybe he could just agree to not aggressively avoid tax on the bonus

(Note. I am sure he had 'options' that would have lowered prices, but he'd have been voted out immediately.)

Likely his bonus is tied to profits and the share price. 

I wonder how many people are dying and or freezing becuase they have to make a decision between heating or eating.

I'm sure the CEO doesn't give one shiny shit as long as his pool is heated and his car collection keeps growing (*)

(*) this may or may not be what he spends his money on but it still stinks.

It wrankles me somewhat how tone deaf some of these people are.  Our company is giving a wage rise of between 4.5% to 10%, with the average going to be 6%.  The exec were quick to point out that they would be slumming it on 4.5%. Our exec earn upwards of £400k + bonuses.  So at least £18k wage rise plus whatever ridiculous amount on top, but those at the bottom would be getting 10% so aren't they lucky??

[Wabaloolah]

The company behind British Gas also has big stakes in that wholesale market (both gas and electricity)


View it like if potatoes were commodified. Due to, say, blight hitting potatoes in some major-producing countries, there's a global potato shortage and global wholesale market prices have soared.

A shop selling potatoes hikes its potato prices that it sells to the public, to reflect the higher wholesale potato price that it paid for its potatoes, in order to maintain its margins.

But the company that owns that shop also owns a huge potato farm who the shop buys its potatoes from. The farm has seen the global wholesale potato price soar and sells at that high wholesale price. To its own potato shop.

The potato shop only makes the same levels of profit.

But the potato farm makes mammoth profits from the higher global potato price.

The company that owns both is quids in.


As an irrelevant aside, I don't think I've ever typed 'potato' so often in a post.

if it's all the same company why doesn't the potato farmer just let the shop have the potatoes for nothing?

[PaulF]

if it's all the same company why doesn't the potato farmer just let the shop have the potatoes for nothing?

Because the farmer has to answer to shareholders.

[PaulF]

So they didn't need to charge the stupidly high prices that threw the markets right across the world into panic mode causing the suppliers everywhere to massively hike their prices up making world bank's panic into raising interest rates and blah di blah di fucking blah....

It's difficult.
If not by raising price, how do they decide who to sell their product to?

[Statto Red]

So they made massive profits by selling what they produce, gas and electric, to the companies who supply us. 

So they didn't need to charge the stupidly high prices that threw the markets right across the world into panic mode causing the suppliers everywhere to massively hike their prices up making world bank's panic into raising interest rates and blah di blah di fucking blah....

If they weren't FTSE thingied they'd be up in court on fraud and corruption charges.

Fucking wankers!!

Whilst at the same time they were making this profit, they were getting bailiffs to break into homes of vulnerable customers, in order to install prepayment meters.

[reddebs]

It's difficult.
If not by raising price, how do they decide who to sell their product to?

What?

Do they 'decide' or just sell to whoever's buying?

They had no need to put their prices up like they did.  They didn't need to make the record breaking profits they have.

They chose to do that and at the same time they put thousands of lives at risk, adding untold debt and stress to already struggling, hard working people and even more to vulnerable people who have no fucking choice.

It's legal fucking robbery and they should be made to feel like the absolute shitstains that they are everywhere they go.

[reddebs]

Whilst at the same time they were making this profit, they were getting bailiffs to break into homes of vulnerable customers, in order to install prepayment meters.

Exactly mate.  They're criminals and should be treated as such.

[Nobby Reserve]

What?

Do they 'decide' or just sell to whoever's buying?

They had no need to put their prices up like they did.  They didn't need to make the record breaking profits they have.

They chose to do that and at the same time they put thousands of lives at risk, adding untold debt and stress to already struggling, hard working people and even more to vulnerable people who have no fucking choice.

It's legal fucking robbery and they should be made to feel like the absolute shitstains that they are everywhere they go.

Like I say, welcome to the world of commodified prices.

Supporters of the system will tell you that it creates a level playing field for all participant countries, so that those without natural resources like gas can buy at a fairly the same price as everyone else.

Of course, not all countries sign up to this. Russia, for instance. Even prior to the Nord Stream 2 issues, they were at loggerheads with the EU over supply contracts. Previously, Russia had sold gas to countries on the basis of set contracts (that set the price and length of contract). Russia would sell at different rates to different countries, depending on whether they viewed that country as 'friendly' or wanted to arm-twist. They used gas supply as a soft-weapon. The EU insisted that all member states must buy at global market spot-rates. This benefited countries in western-Europe (who didn't have great links to Moscow) but penalised countries like Hungary and others with closer ties.

The UK joined the commodity party years ago. We had enough gas to supply us domestically for another several decades. But, under the Thatcher government, and especially post-privatisation, companies were encouraged to export gas as fast as they could pump it. Most of it went into the commodified global market. And even that which is used domestically is sold to UK market retailers at the global spot price.

The result of exporting so much gas is that we have lost energy security, and are susceptible to the sort of massive swings in energy prices we've just witnessed. But on the bright side, a lot of already rich people got a lot richer out of it, and the Tories were able massage down the enormous balance of trade deficit in the 80's & 90's.


Honestly, the older I get and the more is discover how things work behind the scenes, the more I realise we - the oiks - are being mugged-off on a vast scale. And only a bloody revolution, leading to every billionaire and city/bankster shitstain swinging from lampposts will solve it 

[PaulF]

What?

Do they 'decide' or just sell to whoever's buying?

They had no need to put their prices up like they did.  They didn't need to make the record breaking profits they have.

They chose to do that and at the same time they put thousands of lives at risk, adding untold debt and stress to already struggling, hard working people and even more to vulnerable people who have no fucking choice.

It's legal fucking robbery and they should be made to feel like the absolute shitstains that they are everywhere they go.

It's the word we live in , not saying it's right. Without using price as the decider, should they give the fuel to the most needy, wherever in the world that is.