interestrateripoff Posted November 12, 2012 Share Posted November 12, 2012 http://www.guardian.co.uk/business/2012/nov/12/libor-like-manipulation-gas-markets The City watchdog, the Financial Services Authority, is investigating claims by a whistleblower that Britain's £300bn wholesale gas market has been "regularly" manipulated by some of the big power companies, exploiting weaknesses that echo the recent Libor scandal.Separately, the energy regulator Ofgem has been warned by a company responsible for setting so-called benchmark prices, ICIS Heren, that it had seen evidence of suspect trading on 28 September, a key date as it marks the end of the gas financial year and can have an important influence on future prices. The whistleblower, who works for ICIS Heren, raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company. These benchmark prices are critically important because many wholesale gas contracts are based on them and small changes in the price can cost or save companies millions. The revelations come at a highly charged time for Britain's energy sector, with many of the big six suppliers under public fire for alleged profiteering on household energy bills and mis-selling on the doorstep. Even if proved will consumers get a refund? Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted November 12, 2012 Share Posted November 12, 2012 Even if proved will consumers get a refund? Doubtful, but at least some lawyers will get rich. And that's the important thing. Quote Link to comment Share on other sites More sharing options...
frederico Posted November 12, 2012 Share Posted November 12, 2012 Doubtful, but at least some lawyers will get rich. And that's the important thing. Also a few lords presiding over some sort of lengthy enquiry. Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted November 12, 2012 Share Posted November 12, 2012 Go long pitchforks. The LIBOR thing felt detached as most personal/home loans were not DIRECTLY linked to LIBOR. Gas companies have been going on about how prices are rising because of increases in wholesale gas prices. If it comes out each and every person has lost hundreds of pounds but to market manipulation, people simply aren't going to let this go this time. Quote Link to comment Share on other sites More sharing options...
alexw Posted November 12, 2012 Share Posted November 12, 2012 (edited) I've posted on this before in previous threads. That the power company's margins are fictitious and that they are making substantially more than they are saying they are on providing power to households. Seems I was right..... They buy and sell gas wholesale, as well as sell domestically. So manipulate wholesale costs upwards. That immediately reduces the differential between their wholesale 'buy' price and domestic 'sell' price. That enables one of their corporate subsidiaries to make extremely high profits on selling gas wholesale, while the parent makes low profits on selling gas domestically. Then the co's go to the press and claim they 'only' make £50 profit per household. As some said above pitchfork time...... Edited November 12, 2012 by alexw Quote Link to comment Share on other sites More sharing options...
billybong Posted November 12, 2012 Share Posted November 12, 2012 Separately, the energy regulator Ofgem has been warned by a company responsible for setting so-called benchmark prices, ICIS Heren, that it had seen evidence of suspect trading on 28 September, a key date as it marks the end of the gas financial year and can have an important influence on future price. Just the one day Quote Link to comment Share on other sites More sharing options...
SleepyHead Posted November 12, 2012 Share Posted November 12, 2012 The entire system is rigged. All markets, the entire currency system. For pity's sake Quote Link to comment Share on other sites More sharing options...
koala_bear Posted November 12, 2012 Share Posted November 12, 2012 http://www.guardian....ion-gas-markets Even if proved will consumers get a refund? No because it was probably being done by derivative traders not the big 6 energy companies... Besides they were manipulating the index downwards! Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted November 13, 2012 Share Posted November 13, 2012 http://www.guardian.co.uk/business/2012/nov/12/libor-like-manipulation-gas-markets Even if proved will consumers get a refund? No it's worse we'll pay twice! Consumer always pays. If they fine them it'll be passed on in higher prices woop. Or maybe shareholder pays? Quote Link to comment Share on other sites More sharing options...
winkie Posted November 13, 2012 Share Posted November 13, 2012 Even if proved will consumers get a refund? Energy refunds 4 you....ring 0800...... Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted November 13, 2012 Share Posted November 13, 2012 I've posted on this before in previous threads. That the power company's margins are fictitious and that they are making substantially more than they are saying they are on providing power to households. Seems I was right..... They buy and sell gas wholesale, as well as sell domestically. So manipulate wholesale costs upwards. That immediately reduces the differential between their wholesale 'buy' price and domestic 'sell' price. That enables one of their corporate subsidiaries to make extremely high profits on selling gas wholesale, while the parent makes low profits on selling gas domestically. Then the co's go to the press and claim they 'only' make £50 profit per household. As some said above pitchfork time...... Just one problem: On the Sept 28th day - the sole example so far of suspect trading - prices were apparently manipulated down. Yup, sounding just like Libor. Not because the gas market is made up of uncorroborated , non-marked to market submissions - the libor scandal - but because all those who are getting hot under the collar / hopeful of a PPI-like payout will, on the current evidence, find that energy was being manipulated to their advantage. PS : does anybody have a really good grip on what this story is about? My suspicion is that somebody is trying to deflect blame from the government, whose indulgence in green subsidies is the real reason behind our energy price hikes. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted November 13, 2012 Author Share Posted November 13, 2012 http://www.guardian.co.uk/business/2012/nov/13/second-gas-price-reporter-market-manipulation A second price reporter from the gas industry has raised concerns about manipulation of wholesale energy markets, saying he saw suspect trading activity in the autumn of 2011.Jason Torquato, who worked at ICIS Heren, said he was certain any manipulation of indices from the price-reporting agencies, such as ICIS, could "influence retail gas prices". He said he had noted "half a dozen or a dozen" occasions that price differentials over the course of a year looked unusual, with one particularly marked case on 9 September 2011. Torquato's claims come amid a growing political storm triggered by Guardian revelations that a first whistleblower, Seth Freedman, also from ICIS, had gone to the City watchdog, the Financial Services Authority, with price-fixing claims centring on 28 September this year. Torquato said he had since also reviewed the 28 September data and come to a similar conclusion. "I have looked at it in a fair amount of depth, and it looks very suspicious," he said. "I had a similar scenario when I was working there in 2011. It was September. I think it was a Friday, and traditionally a Friday is a lot less liquid, when the market is more open to manipulation because of one person doing something." More gas for the fire.... Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted November 13, 2012 Share Posted November 13, 2012 What must Angela Knight be thinking? She moves away from a Libor rigging scandal http://www.bloomberg.com/news/2012-04-02/knight-to-step-down-as-ceo-of-british-bankers-association.html Then finds herself in a gas rigging scandal http://www.bbc.co.uk/news/business-20307412 Where is she going next? Quote Link to comment Share on other sites More sharing options...
ingermany Posted November 13, 2012 Share Posted November 13, 2012 (edited) Elsewhere in the News the Welsh government admits spending £27m of taxpayers money manipulating house prices upwards to make them more expensive. Edited November 13, 2012 by ingermany Quote Link to comment Share on other sites More sharing options...
R K Posted November 13, 2012 Share Posted November 13, 2012 What must Angela Knight be thinking? She moves away from a Libor rigging scandal http://www.bloomberg...ssociation.html Then finds herself in a gas rigging scandal http://www.bbc.co.uk...siness-20307412 Where is she going next? Fool me once....shame on...... Quote Link to comment Share on other sites More sharing options...
wonderpup Posted November 13, 2012 Share Posted November 13, 2012 What must Angela Knight be thinking?She moves away from a Libor rigging scandal Then finds herself in a gas rigging scandal Where is she going next? Yeh- she got out of the BBA just in time- and landed up to her neck in this muck instead. Quote Link to comment Share on other sites More sharing options...
LightEnds Posted November 13, 2012 Share Posted November 13, 2012 I write gas trading systems and I know the UK gas market very well. There are so few players compared to other markets and this makes for a volatile and sometimes illiquid market. Most off the action happens in the last half hour of the day. The resultant EOD price is used in all manner of commercial agreements between producers and shippers. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted November 13, 2012 Share Posted November 13, 2012 Yup, sounding just like Libor. Not because the gas market is made up of uncorroborated , non-marked to market submissions - the libor scandal - but ... Well now the jokes on me, cos apparently the wholesale gas market is built on "uncorroborated , non-marked to market submissions". You'd have thought in this day and age we could do w/o these stupid submission based markets and move to wholly electronic exchanges with checks and balances, but apparently that would be too simple. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted November 14, 2012 Share Posted November 14, 2012 http://www.guardian.co.uk/business/2012/nov/12/libor-like-manipulation-gas-markets Even if proved will consumers get a refund? ...hah ..a German colleague of my daughter asked about a month ago why gas and electric are so expensive in the UK when it is so much cheaper in Germany and as she put it they are not even producers of gas ....what is different in the UK...?...maybe we should look there to find an answer ...through their markets... Quote Link to comment Share on other sites More sharing options...
billybong Posted November 14, 2012 Share Posted November 14, 2012 (edited) The standard answer to these things when consumers' energy prices are going up rapidly in accordance with the rate that the wholesale price is increasing is - we have to keep matching the increasing wholesale prices. When consumers energy prices have peaked for the time being and are relatively static but wholesale prices are dropping like a stone the suppliers are all - well we can't take advantage because we've had to buy at the high prices for years into the future to ensure supplies. Whatever the situation they have the glib answer but they're never questioned on it in any depth at the time. "FSA investigates" - investigates, yeah right - as if they don't know anything - they're only supposed to regulate stuff. As for Ofgem (.gov.uk). How are we funded? We recover our costs from the licensed companies we regulate. Licensees are obliged to pay an annual licence fee which is set to cover our costs. Ofgem is independent of the companies we regulate. We operate under a five-year cost control regime that runs 2010-2015. It pegs our expenditure growth at 3 percentage points below the retail price index. This is expected to result in savings of £12.5 million. As independent as the BoE? Ofgem is the Office of the Gas and Electricity Markets. Protecting consumers is our first priority. We do this by promoting competition, wherever appropriate, and regulating the monopoly companies which run the gas and electricity networks. The interests of gas and electricity consumers are their interests taken as a whole, including their interests in the reduction of greenhouse gases and in the security of the supply of gas and electricity to them. "We do this by promoting competition,." Investigation? - whitewash more like. Edited November 14, 2012 by billybong Quote Link to comment Share on other sites More sharing options...
thod Posted November 14, 2012 Share Posted November 14, 2012 Yet we can see how much money these companies are making. That is what public accounts and auditing are for. Companies do not hide the fact that they are making money, they shout it from the rooftops in order to increase their share price (executive share options). If a company was breaking even using this manipulation, then it would make a loss without it, thus would have to raise prices. Thus far from being a consumer rip off, this is beneficial to the consumer. They are taking money from commodity gamblers to subsidize gas. Off course that is why you are hearing about it and why it is spun in reverse. The city bods take, they don't give. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted November 14, 2012 Share Posted November 14, 2012 Thus far from being a consumer rip off, this is beneficial to the consumer. They are taking money from commodity gamblers to subsidize gas. Off course that is why you are hearing about it and why it is spun in reverse. The city bods take, they don't give. I'm not sure if it is beneficial to the consumer. Could this not be a case of securing the gas for less money and then failing to pass that saving on to the end consumer. I would love to think of big utility companies doing everything they can to help their customers, but reality prevents me from doing so. Quote Link to comment Share on other sites More sharing options...
Guest eight Posted November 14, 2012 Share Posted November 14, 2012 ...hah ..a German colleague of my daughter asked about a month ago why gas and electric are so expensive in the UK when it is so much cheaper in Germany and as she put it they are not even producers of gas ....what is different in the UK...?...maybe we should look there to find an answer ...through their markets... Posted this on a similar thread to no response, but just a few weeks ago BBC news ran a report about energy buying clubs in Belgium, of all places. The example woman was paying €200/month for energy, she joined one of these clubs and as a result of this action alone (ie. she didn't change her consumption habits) her bills fell by 75%. Suggests a huge level of profiteering by the energy companies, assuming it was still profitable to supply her at the lower rate. Alternatively it could mean that billing, account management etc. make up a bigger part of your bill than the actual energy does. Got a busy day today but will try to find a link. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted November 14, 2012 Share Posted November 14, 2012 Posted this on a similar thread to no response, but just a few weeks ago BBC news ran a report about energy buying clubs in Belgium, of all places. The example woman was paying €200/month for energy, she joined one of these clubs and as a result of this action alone (ie. she didn't change her consumption habits) her bills fell by 75%. Suggests a huge level of profiteering by the energy companies, assuming it was still profitable to supply her at the lower rate. Alternatively it could mean that billing, account management etc. make up a bigger part of your bill than the actual energy does. Got a busy day today but will try to find a link. ...looks like it's all going to fund the high salaries and bonuses of the utility companies in the UK....sounds like a very interesting story from Belgium....look forward to it...my daughter's German colleague was quoting bills of one third the UK which follows a similar trend... Quote Link to comment Share on other sites More sharing options...
Number79 Posted November 14, 2012 Share Posted November 14, 2012 I've posted on this before in previous threads. That the power company's margins are fictitious and that they are making substantially more than they are saying they are on providing power to households. Seems I was right..... They buy and sell gas wholesale, as well as sell domestically. So manipulate wholesale costs upwards. That immediately reduces the differential between their wholesale 'buy' price and domestic 'sell' price. That enables one of their corporate subsidiaries to make extremely high profits on selling gas wholesale, while the parent makes low profits on selling gas domestically. Then the co's go to the press and claim they 'only' make £50 profit per household. As some said above pitchfork time...... There is another element too, for the majority on direct debit. A level of DD is set, say £100 a month. Through the summer gas use is small, in the autumn the dd gets reduced to £50 to mirror actual usage. Gas use is far heavier during the winter, come spring - oops you used far more than £50 the dd is being increased to £150 to reflect your winter usage. The extra money collected all through the warm months for no reason is used to forward buy gas wholesale at the time of year when it is the cheapest. Quote Link to comment Share on other sites More sharing options...
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