energy prices

[pablo]

58 minutes ago, Victorian said:

 

Because this government is in a number of strait jackets.  Ideological,  as well as the simbiotic existence it shares with big business and the financial markets.  This ruling party relies on donated funding from those who routinely benefit from the continuation of societal larceny,  market rigging,  deregulation,  government looking the other way,  etc.  It also relies on it's economic philosophical schtick.  Free market economy that self regulates and self equalises through competition of supply and price.  Private sector always provides into every gap vacated by the state.  Small state intervention.  Bare minimum state safety net.  The impression that the perceived socialist policy of nationalisation has proved to be absolutely necessary and has saved the economy puts a huge dent into their very existence.  

 

The Tories will not nationalise or underwrite the energy market until the evidence of severe health consequences and a hopelessly smashed economy come to full public consciousness.  Even then it would be repackaged as some kind of special economic operation.  It wont be borne out of the desperation to save people.  Only out of self preservation.

 

This bit is definitely correct. This new Tory party will intervene to tackle the impact of inflation on the economy. But it will do so to rebalance the profitability of intra-capitalist factions. Any capitalist state won't tolerate this situation long term.

 

When one group of capitalists (in this case the giant energy monopolies) make huge profits at the expense of other areas of capital, the state will step in to redress the imbalance and protect the profitability of the wider economy.

 

But you're right, it certainly won't be to protect the well being of the working man and woman.

[The Mighty Thor]

4 hours ago, periodictabledancer said:

It doesn't have to be - look at the massive rise & sudden fall of petrol & diesel (admittedly they're still not back to previous levels but there's  a significant fall nonetheless. 

We need to understand how/if countries like Qatar/Algeria/Australia can help by boosting production.  Even if it's only for a few years while renewables are developed more widely by government support & investment. Even if we go nuclear that will still take a decade or nore to get reactors up & running. 

The current levels are not sustainable either for the individual consumer or even worse, industry generally. 

Nothing that has gone up 215% comes down 215%.

These prices will become the new norm. Ukraine will be phased out to be replaced with 'Climate Emergency' and the bills will stay at 3/4/5/6 grand forever more amen because the energy companies are calling the shots and the Tories are rabbit in the headlights petrified of calling out big business. 

 

The price petrol and diesel should be based on the current oil price is around £1.30 not the £1.83 I paid this morning. 

 

Companies are holding the country to ransom. Time to call their bluff. 

 

 

[Jambo-Jimbo]

In a clear sign of the times, Centrica have been given permission to re-open the Rough gas storage facility off the East coast of England.

https://www.reuters.com/business/energy/britain-allows-centrica-reopen-rough-gas-storage-facility-2022-08-30/

[WorldChampions1902]

1 hour ago, The Mighty Thor said:

Nothing that has gone up 215% comes down 215%.

These prices will become the new norm. Ukraine will be phased out to be replaced with 'Climate Emergency' and the bills will stay at 3/4/5/6 grand forever more amen because the energy companies are calling the shots and the Tories are rabbit in the headlights petrified of calling out big business. 

 

The price petrol and diesel should be based on the current oil price is around £1.30 not the £1.83 I paid this morning. 

 

Companies are holding the country to ransom. Time to call their bluff. 

The energy market is indulging in blatant price gouging. Such exploitation should be addressed by any responsible government. Let’s see if Truss can be trusted to act decisively .
 

I think we all know the answer.

[jack D and coke]

I’ve long thought him a bit of a twat but his meltdown continues it seems. Covid seems to have fried his brain. 

Seen him called a fascist Marti Pellow the other day which slightly amused…

 

[jack D and coke]

Hmm…probably some truth in it. 

[Unknown user]

2 minutes ago, jack D and coke said:

Hmm…probably some truth in it. 

 

I said it when the last rise was announced - everyone will shit a brick at the next one, and this unreasonable piece of shit now will be the new norm.

 

We shouldn't forget, when the last one was announced, it was so shocking it caused a Tory government to tax a massive company and hand actual money out to plebs.

 

**** pegging the rates where they are now.

 

 

[jack D and coke]

Is this true? Bloody hell…

[Ulysses]

[vegas-voss]

8 hours ago, The Mighty Thor said:

Nothing that has gone up 215% comes down 215%.

These prices will become the new norm. Ukraine will be phased out to be replaced with 'Climate Emergency' and the bills will stay at 3/4/5/6 grand forever more amen because the energy companies are calling the shots and the Tories are rabbit in the headlights petrified of calling out big business. 

 

The price petrol and diesel should be based on the current oil price is around £1.30 not the £1.83 I paid this morning. 

 

Companies are holding the country to ransom. Time to call their bluff. 

 

 

We will get a slight dip in what we will pay but aye the new morm will be expensive as **** and made out to be the prices have dropped

[vegas-voss]

It's ****ing mental a 2nd mortgage for your utility bills or a first for folk that can't even become home owners 

[vegas-voss]

So everything about the UK leads to us having higher bills and also our government is basically doing **** all compared to others to shield us from the rises

 

https://www.google.com/amp/s/www.euronews.com/my-europe/amp/2022/08/26/soaring-energy-prices-how-does-the-uk-compare-with-europe

[ri Alban]

4 hours ago, jack D and coke said:

Is this true? Bloody hell…

You'll just get some bollox about independence, bud, if you point out what's happening in Shetland.

[The Mighty Thor]

It's the Ukraine war likesy....

 

Thank the lord the Tories are in power to sort this out.

 

Oh wait!

[The Mighty Thor]

I said this weeks ago. Hammer the price cap down and suddenly wholesale prices will fall like a stone and miraculously the energy generators will still make profits 🤔

 

 

[Captain Sausage]

31 minutes ago, The Mighty Thor said:

I said this weeks ago. Hammer the price cap down and suddenly wholesale prices will fall like a stone and miraculously the energy generators will still make profits 🤔

 

 

I mean, that’s just simply not how it works. Murphy is an absolute doom monger - go back through his tweets and you’ll see he’s an absolute fantasist. He’s recently tweeted that the U.K. is preparing to lay groundwork to undo Brexit and that we are in apocalyptic times. 
 

The U.K. implementing a price cap will have absolutely no effect on wholesale prices. The wholesale market is driven by global demand. An artificial cap would require the U.K. government to pick up the tab on the delta (something I think they should be doing…) but it would do nothing about the wholesale market. 
 

Oil and gas producers are taking in a fortune at the moment because the wholesale market is so hot.  They are not racketeering as Murphy suggests, they are selling a product at market rate. How a supposed professor of accounting fails to understand this is beyond me. 

Edited August 31, 2022 by Captain Sausage

[manaliveits105]

but but it’s on twatter 

[The Mighty Thor]

40 minutes ago, Captain Sausage said:

I mean, that’s just simply not how it works. Murphy is an absolute doom monger - go back through his tweets and you’ll see he’s an absolute fantasist. He’s recently tweeted that the U.K. is preparing to lay groundwork to undo Brexit and that we are in apocalyptic times. 
 

The U.K. implementing a price cap will have absolutely no effect on wholesale prices. The wholesale market is driven by global demand. An artificial cap would require the U.K. government to pick up the tab on the delta (something I think they should be doing…) but it would do nothing about the wholesale market. 
 

Oil and gas producers are taking in a fortune at the moment because the wholesale market is so hot.  They are not racketeering as Murphy suggests, they are selling a product at market rate. How a supposed professor of accounting fails to understand this is beyond me. 

Forgive me, I've always laboured under the impression that the price of a commodity was driven by what people were willing to pay for it?

 

You can set the price of something you're trying to sell at whatever you want. If no one is buying you'll be bringing your price down until such times as someone thinks your product is good value.

 

What we're seeing on gas prices is not 'global demand' it is an artificially whipped up price vortex initiated by Russia and then exacerbated by energy companies taking the piss. Making hay whilst they've got the cover of Russia/Ukraine. 

 

Murphy may be a fantasist but how do you explain away the very sharp drop in wholesale prices as soon as the EU threaten to regulate?

 

So if the UK government and the wider EU set a price they're willing to pay per therm at let's say 200p per therm then are you seriously suggesting that no one will sell it to them?

 

They will and not only that they'll still be making a profit from it too. 

 

[Scallywag]

7 hours ago, jack D and coke said:

Is this true? Bloody hell…

Yes this is true. Many factors coming together at once but without immediate help it will be a disaster.

 

Longterm the scottish government must do much more to assist, one sized fit all policies that don't work in island settings is part of the problem. Only but the most staunch unionists know however that the blame for the current situation is mostly with Westminster. 

 

Rediculous that an island surrounded by oil and gas and in the process of being covered in wind farms is facing this crisis. 

 

[Jambo-Jimbo]

On 29/08/2022 at 17:05, Imaman said:

Gas light at the end of the tunnel 

 

BERLIN (Reuters) - German Economy Minister Robert Habeck expects gas prices to fall soon as Germany is making progress on its storage targets and won’t have to pay the high asking prices currently commanding the market, he said on Monday.

“As a result, the markets will calm and go down,” he said, adding that they had shot up recently due to high demand as well as market speculation, which could not be sustained long term.

Germany’s gas storage facilities are nearly 83% full and will hit 85% full in early September, Habeck said at an energy event in Hamburg. Germany has set a goal for gas storage levels to be 85% filled by Oct. 1 and 95% filled by Nov. 1.

 

 

35 minutes ago, The Mighty Thor said:

Murphy may be a fantasist but how do you explain away the very sharp drop in wholesale prices as soon as the EU threaten to regulate?

 

 

Maybe Germany's announcement in the last few days that their gas storage facilities are nearly full and won't be needing to buy as much gas might have had an effect on the wholesale price.  Of course the added threat of direct government action usually gets people to sit up and take notice as well, but I don't think that's the only thing at play here.

[SE16 3LN]

13 hours ago, periodictabledancer said:

Point noted but I really couldn't care less. 

Neither  could the Scottish govt. or the people of Scotland. 

[SE16 3LN]

7 hours ago, jack D and coke said:

Is this true? Bloody hell…

Totally let down by the country that owns them.

[jack D and coke]

3 minutes ago, SE16 3LN said:

Totally let down by the country that owns them.

I assume we’re talking about post 2007 and at absolutely no point before that? 

Edited August 31, 2022 by jack D and coke

[hughesie27]

Anyone joined Utility Warehouse?

 

If you adopt some boiler cover or Broadband/Sim Card at the same time then they seem to have some very decent offers going. 

[Captain Sausage]

1 hour ago, The Mighty Thor said:

Forgive me, I've always laboured under the impression that the price of a commodity was driven by what people were willing to pay for it?

 

You can set the price of something you're trying to sell at whatever you want. If no one is buying you'll be bringing your price down until such times as someone thinks your product is good value.

 

What we're seeing on gas prices is not 'global demand' it is an artificially whipped up price vortex initiated by Russia and then exacerbated by energy companies taking the piss. Making hay whilst they've got the cover of Russia/Ukraine. 

 

Murphy may be a fantasist but how do you explain away the very sharp drop in wholesale prices as soon as the EU threaten to regulate?

 

So if the UK government and the wider EU set a price they're willing to pay per therm at let's say 200p per therm then are you seriously suggesting that no one will sell it to them?

 

They will and not only that they'll still be making a profit from it too. 

 

The global market (90% of which is outside the EU) will continue to pay market rate for gas. Unless every purchaser comes together to say ‘no, we all agree on a cap’ then producers will continue to sell to the highest bidder. It’s capitalism 101. 

[Victorian]

To sustainably force down the market price it would surely need more than some storage being employed and some words from the EU.  It would surely require widespread cooperation between all of the major consumers.  To absolutely force the market to sell the commodity at the achievable price.   Without that then surely the market demand will inevitably creep price back up to a natural supply & demand level.  Residual demand at a higher price than the desired cap = price goes beyond the purpose of the cap.

 

 

 

 

[Victorian]

If the purpose is to force the major producers to sell at a set price then the only solution is to take control of supply.  You need to nationalise or legislate for domestic production to remain off the market.  You keep what you generate.

[The Mighty Thor]

27 minutes ago, Captain Sausage said:

The global market (90% of which is outside the EU) will continue to pay market rate for gas. Unless every purchaser comes together to say ‘no, we all agree on a cap’ then producers will continue to sell to the highest bidder. It’s capitalism 101. 

100% of the infrastructure that moves gas around Europe is in Europe. 

 

So is most of the resource which goes through that infrastructure.

 

Norwegian gas is not getting to Auckland through a pipe. That's infrastructure 101. 

 

Therefore the European wide gas market is effectively a micro-market, whilst impacted by 'global' price variations the reality is if European customers say no/nein/non then the market price in Europe will come down. As it did yesterday. 

[Victorian]

1 minute ago, The Mighty Thor said:

100% of the infrastructure that moves gas around Europe is in Europe. 

 

So is most of the resource which goes through that infrastructure.

 

Norwegian gas is not getting to Auckland through a pipe. That's infrastructure 101. 

 

Therefore the European wide gas market is effectively a micro-market, whilst impacted by 'global' price variations the reality is if European customers say no/nein/non then the market price in Europe will come down. As it did yesterday. 

 

True.  But something else is required regarding electricity generation not generated by gas fired production.  Nuclear and renewables.  The energy produced needs to be extricated from the wholesale market forces.  Something is required to prevent that energy simply entering the market and being subjected to the same demand derived price.

[Dazo]

1 hour ago, hughesie27 said:

Anyone joined Utility Warehouse?

 

If you adopt some boiler cover or Broadband/Sim Card at the same time then they seem to have some very decent offers going. 

You’re buying something extra for a 2.5% discount it seems. It is still a variable tariff so they could easily bump up the prices after you join. 

[SE16 3LN]

1 hour ago, jack D and coke said:

I assume we’re talking about post 2007 and at absolutely no point before that? 

I think 15 years is a fair time scale for turning things round, don't you?

[jack D and coke]

2 minutes ago, SE16 3LN said:

I think 15 years is a fair time scale for turning things round, don't you?

Not really being aware of the situation pre snp I don’t know. 
Are they just like some people all over Scotland in a perma rage at the snp being in power?

Speak or listen to actual Shetlanders and I don’t hear that. A mate of mine is married to one and I hear them on the radio etc that’s my only experience. I don’t hear the purported dislike of Scotland in general in all honestly. The only time I hear of it is by other people not from there telling me it’s terrible now cos SNP. 

[SE16 3LN]

3 minutes ago, jack D and coke said:

Not really being aware of the situation pre snp I don’t know. 
Are they just like some people all over Scotland in a perma rage at the snp being in power?

Speak or listen to actual Shetlanders and I don’t hear that. A mate of mine is married to one and I hear them on the radio etc that’s my only experience. I don’t hear the purported dislike of Scotland in general in all honestly. The only time I hear of it is by other people not from there telling me it’s terrible now cos SNP. 

Deflection of the highest order. The situation is a ****ing outrage and blaming Unionists, or anyone else for that matter, is the reason nobody takes you seriously anymore. It was you who raised the matter 😃.

[jack D and coke]

13 minutes ago, SE16 3LN said:

Deflection of the highest order. The situation is a ****ing outrage and blaming Unionists, or anyone else for that matter, is the reason nobody takes you seriously anymore. It was you who raised the matter 😃.

I don’t know why is that deflection?
Nobody takes me seriously do they?

Is there some place I don’t know about where I’m discussed?☹️

How will I cope with that sick burn from a poster as respected as you are😂

I raised the matter?! 


 

 

[Unknown user]

27 minutes ago, SE16 3LN said:

Deflection of the highest order. The situation is a ****ing outrage and blaming Unionists, or anyone else for that matter, is the reason nobody takes you seriously anymore. It was you who raised the matter 😃.

All this stuff you're thundering on about is happening under the current system.

Sounds like you agree we need a complete change of system.

[vegas-voss]

£273 standard charges next year Martin Lewis is saying with Scotland expected to pay more.How are our standard charges more ?

Edited August 31, 2022 by vegas-voss

[Jeff]

15 minutes ago, vegas-voss said:

£273 standard charges next year Martin Lewis is saying with Scotland expected to pay more.How are our standard charges more ?

 

That's madness. Imagine not using gas or electricity at all and still having to cough up 270 quid

[Jambo-Jimbo]

15 minutes ago, vegas-voss said:

£273 standard charges next year Martin Lewis is saying with Scotland expected to pay more.How are our standard charges more ?

 

Remember reading something about this back in the spring, there are several area's around the UK which pay more, Scotland is one of them, of course I'd bet London will be amongst the cheapest tho. 

[Captain Sausage]

4 hours ago, The Mighty Thor said:

100% of the infrastructure that moves gas around Europe is in Europe. 

 

So is most of the resource which goes through that infrastructure.

 

Norwegian gas is not getting to Auckland through a pipe. That's infrastructure 101. 

 

Therefore the European wide gas market is effectively a micro-market, whilst impacted by 'global' price variations the reality is if European customers say no/nein/non then the market price in Europe will come down. As it did yesterday. 

Cool. No doubt Norway will be absolutely fine to subsidise European bills at their expense. 
 

Add to that Norway exports 3% of global gas. Where does the EU get the rest from? Caspian and Middle East predominantly. I’m sure our Azeri and Qatari friends will be equally supportive of a price cap and definitely not just sell the gas to other markets (India and China predominantly) given the extra profit they can make there. 
 

And I’m sure EU taxpayers will be fine with rolling blackouts due to lack of gas as a result of a bizarre purchase cap imposed by their governments. 
 

Your lack of grounding in this topic is pretty evident, but you’ve got the confidence to keep going. 

[The Mighty Thor]

17 minutes ago, Captain Sausage said:

Cool. No doubt Norway will be absolutely fine to subsidise European bills at their expense. 
 

Add to that Norway exports 3% of global gas. Where does the EU get the rest from? Caspian and Middle East predominantly. I’m sure our Azeri and Qatari friends will be equally supportive of a price cap and definitely not just sell the gas to other markets (India and China predominantly) given the extra profit they can make there. 
 

And I’m sure EU taxpayers will be fine with rolling blackouts due to lack of gas as a result of a bizarre purchase cap imposed by their governments. 
 

Your lack of grounding in this topic is pretty evident, but you’ve got the confidence to keep going. 

 

You're spot on, I'm not an energy trader.

 

So given your abundance of grounding how does the suggestion of EU intervention in the market wipe off 25% of the forward gas price in one afternoon rather than the market, including the Norwegians, Azeri & Qatari gas giants not just absorbing that news safe in the knowledge they have far more profitable markets waiting to take their gas? Genuine question. 

 

 

[Captain Sausage]

1 minute ago, The Mighty Thor said:

 

You're spot on, I'm not an energy trader.

 

So given your abundance of grounding how does the suggestion of EU intervention in the market wipe off 25% of the forward gas price in one afternoon rather than the market, including the Norwegians, Azeri & Qatari gas giants not just absorbing that news safe in the knowledge they have far more profitable markets waiting to take their gas? Genuine question. 

 

 

Because traders are hedging that other large economies, namely North Americans, will follow suit. 
 

As I said, and I believe @Victorian mentioned, widespread downward manipulation of the market by governments would result in reduced wholesale market prices, as a result of a smaller purely capitalist market available. But you intimated the U.K. could drive this themselves, which I was pointing out is incorrect. 

[The Mighty Thor]

12 minutes ago, Captain Sausage said:

Because traders are hedging that other large economies, namely North Americans, will follow suit. 
 

As I said, and I believe @Victorian mentioned, widespread downward manipulation of the market by governments would result in reduced wholesale market prices, as a result of a smaller purely capitalist market available. But you intimated the U.K. could drive this themselves, which I was pointing out is incorrect. 

 

Point taken on the UK being unable to manipulate world demand.

 

With around 50% of our gas being imported we'd still be under pressure from market conditions, but nowhere near to the degree where our energy costs are up 215% and the EU countries who are far more reliant on imported gas are not suffering the same increases. They're experiencing fractions of it. 

 

That's local market manipulation and that is precisely what a proper energy cap would stop in the UK. 

 

Given your knowledge in this field, do you believe that there's nothing the UK Government can do to prevent the pricing vortex we are in and do you think that energy bills of £6,000 are a fair reflection of the global market price?

Edited August 31, 2022 by The Mighty Thor

[Captain Sausage]

Just now, The Mighty Thor said:

 

Point taken on the UK being unable to manipulate world demand.

 

With around 50% of our gas being imported we'd still be under pressure from market conditions, but nowhere near to the degree where our energy costs are up 215% and the EU countries who are far more reliant on imported gas are not suffering the same increases. They experiencing fractions of it. 

 

That's local market manipulation and that is precisely what a proper energy cap would stop in the UK. 

 

Given your knowledge in this field, do you believe that there's nothing the UK Government can do to prevent the pricing vortex we are in and do you think that energy bills of £6,000 are a fair reflection of the global market price?

I think the only practical thing the U.K. government could do (and I certainly think they have a moral duty to act) is to cap the price the end user pays. 
 

We should align to any downward manipulation implemented by Europe but the reality is that the artificial cap will have to paid for through additional borrowing. 
 

We did it for covid so I don’t see why we can’t do it again. Arguably a bigger crisis in store than what we’ve just been through. 
 

On the 6k, it’s predicated on continued increases to the gas prices. I think it’s possible given the predicted demand from Asian markets going forward and the lack of visibility of an end to the Russian invasion of Ukraine. However, spiralling inflation should cause cutbacks globally which will dampen demand and might counter some of the additional pricing being visualised. 
 

6k is the realistic worst case. I’m hopeful we’ll see a balancing point around where we are predicted to be in January (ie 3.5k ish) but it’s so unpredictable that anyone who tells you what the answer will be is just guessing. 

[The Mighty Thor]

2 minutes ago, Captain Sausage said:

I think the only practical thing the U.K. government could do (and I certainly think they have a moral duty to act) is to cap the price the end user pays. 
 

We should align to any downward manipulation implemented by Europe but the reality is that the artificial cap will have to paid for through additional borrowing. 
 

We did it for covid so I don’t see why we can’t do it again. Arguably a bigger crisis in store than what we’ve just been through. 
 

On the 6k, it’s predicated on continued increases to the gas prices. I think it’s possible given the predicted demand from Asian markets going forward and the lack of visibility of an end to the Russian invasion of Ukraine. However, spiralling inflation should cause cutbacks globally which will dampen demand and might counter some of the additional pricing being visualised. 
 

6k is the realistic worst case. I’m hopeful we’ll see a balancing point around where we are predicted to be in January (ie 3.5k ish) but it’s so unpredictable that anyone who tells you what the answer will be is just guessing. 

Appreciate the response.

 

I still believe that we in the UK are being bent over right now. 

 

Companies are being allowed to run roughshod and the government has gone AWOL for the last 2 months which has presented a golden opportunity for firms and the industry regulator to take the piss. 

[ri Alban]

6 hours ago, SE16 3LN said:

Neither  could the Scottish govt. or the people of Scotland. 

I care.

[ri Alban]

SNP getting blamed for the crisis about to hit Shetland. I've heard it all now. One things for sure, we wouldn't be in this mess if we had rid ourselves of WM corruption in 2014.

[The Mighty Thor]

23 minutes ago, Captain Sausage said:

I think the only practical thing the U.K. government could do (and I certainly think they have a moral duty to act) is to cap the price the end user pays. 
 

We should align to any downward manipulation implemented by Europe but the reality is that the artificial cap will have to paid for through additional borrowing. 
 

We did it for covid so I don’t see why we can’t do it again. Arguably a bigger crisis in store than what we’ve just been through. 
 

On the 6k, it’s predicated on continued increases to the gas prices. I think it’s possible given the predicted demand from Asian markets going forward and the lack of visibility of an end to the Russian invasion of Ukraine. However, spiralling inflation should cause cutbacks globally which will dampen demand and might counter some of the additional pricing being visualised. 
 

6k is the realistic worst case. I’m hopeful we’ll see a balancing point around where we are predicted to be in January (ie 3.5k ish) but it’s so unpredictable that anyone who tells you what the answer will be is just guessing. 

Actually mate, i take it all back. We're ****ed. I've just read Jacob Rees Mogg is being touted as the Secretary of State for BIES

[ri Alban]

Kwasi the new Chancellor  

 

 

 

Did anyone see that Dorries. She would do anything for Johnson and I mean anything. Her husband and his wife must be like.

[Captain Sausage]

2 minutes ago, The Mighty Thor said:

Actually mate, i take it all back. We're ****ed. I've just read Jacob Rees Mogg is being touted as the Secretary of State for BIES

BEIS is a dysfunctional joke of an organisation. I’m sure he will use his experience as Brexit efficiencies minister to whip those scallywags into shape

 

14 minutes ago, The Mighty Thor said:

Appreciate the response.

 

I still believe that we in the UK are being bent over right now. 

 

Companies are being allowed to run roughshod and the government has gone AWOL for the last 2 months which has presented a golden opportunity for firms and the industry regulator to take the piss. 

Probably worth clarifying a couple of points. 
 

OFGEM, the energy regulator, are there to regulate energy suppliers. In theory, to protect consumers. OFGEM cover companies like Eon, Centrica and SSE. These companies are at the mercy of the wholesale market. The cap was designed to stop them taking the piss with charges for consumers, it was not designed for sustained price pressure on the wholesale market. OFGEM we’re absolutely asleep at the wheel but there’s no quick fix for the regulator here.

 

All those small companies that went bust? It was because they didn’t spend money to hedge future gas prices and when the price took off, they simply ran out of money. The bigger companies have more sophisticated (read: expensive) hedging strategies which have protected them a bit from the wholesale market, but they’re screaming now because they simply cannot afford the 3-5k per consumer cost per year. 
 

The government has three choices:

- nationalise the energy suppliers

- do nothing

- subsidise the energy suppliers

 

The people who are making stupid money off the current situation are the energy producers. While Centrica and SSE have production arms, these are chicken shit when compared to Shell or bp. It’s the producers who are exposed directly to wholesale prices that are coining it in at present. As they work directly with the market, there is very little regulation of them from a financial angle (above and beyond regular FCA requirements). They are regulated via OGA, BEIS, NTSA, EA, etc but these are predominantly to prevent emissions and ensure accurate reporting of throughput. 
 

It’s interesting that a lot of politicians across Europe were slow to react to Russia and questioned whether people were willing to support Ukraine, even if it hit them in the pocket. They didn’t do a very good job at articulating what ‘hitting them in the pocket’ really meant. What we see today is what it means. FWIW, I fully support all the work being done to protect Ukraine, but people should be aware it’s not happening for free. 

[joondalupjambo]

Not everyone will get protected here from the high energy prices.  

Who will take a hit?

The poor? Do not think so this time round.

The rich?  No that is for sure.

The middle classes?  Do not think so.

Small business?  I have a bad feeling that a lot of those will get fe@cked here.

Edited August 31, 2022 by joondalupjambo