Quote:
Originally Posted by sln8458
It costs the oil/gas producers, those that own the offshore platforms, about £0.35/unit to get it to the 'beach'.
Note: the 'unit I refer to is NOT the unit in your gas meter.
From there it goes into the distribution network and your supplier. There is a cost uplift for the network and suppliers to cover their costs.
ATM all gas is sold on the open market, and here is where the problem is, (in my eyes).
Back in the day British Gas (ie the UK Gov at it was a nationalised industry) had agreements with most/all of the oil/gas producers to 'buy' their product at a fixed amount.
However over the years these agreements ended and were not renegotiated.
Back to the problem,
As the gas is sold at 'spot' price we are in the hands of 'the money men', those that sell 'future' etc.
In early 2020 the spot price was £0.09/unit, yes well below cost. However you & I did not see a huge reduction in our bills.
Many 'new' companies were setup to sell this product to you & I, making a profit out of the low gas price.
Roll forward 18 months and now the market price has jumped, the profit has gone, and now so have those that jumped on the band wagon. Boots filled!
In a year or so we will come back around the circle and prices will drop, a bit, but the winners will always be those 'money men'
Personally I feel the water/gas/electric SHOULD be a national industry, not because of my political views, but because they are necessities.
Sorry, I'll get off my box.
Steve  |
That's a very good summary. I would make a few further points.
1. The UK is an insignificant entity in terms of controlling energy wholesale prices. The key players are the US, Arab states, Russia, China and Europe.
2. After Russia's annexation of crimea, oil price took a nose dive as a result of the US working with the Arab states. This really hurt the Russian economy, as intended.
3. The Russians actually prefer long-term gas supply contracts but over the years Europe has preferred spot market purchasing, I guess so that the US and Europe could control the prices as in 2 above?
4. There is little doubt that Russian actions designed to regain a different position for their world status than current are at least partly responsible for the current prices. The rest is predictably down to the reaction of the energy markets and the money men.
Whilst as a principle I believe that all utility supplies should be under national government control, this can only provide some stabilising of prices. At the end of the day, the big energy producers and consumers will always be in a stronger position to use energy as a weapon.