Guest sillybear2 Posted August 1, 2008 Share Posted August 1, 2008 (edited) 922 million is not a huge profit then because it is 69% down. So they raise prices by 33 % to get back to their previous monstrous profit.My poblem is not with companies making money, its with stuff like this that are neccesities and affect the poor and elderly sometimes in a life threatening way. I dont think energy companies should have ever been privatized, that is my a opinion and that doesnt make me a sixth former with naive communist values my friend. £922m is the total profit, down about -20% compared to the same period last year. The UK household supply business saw a profit of £166m, 69% down from a profit of £533m last year, so they were making far more money last year when prices were lower. That's why their large increase for some tariffs isn't about pure profiteering or kicking people where it hurts at it may first appear. Given wholesale gas prices without the increases their residential business would become loss making, and given the poor performance of their share price obviously they cannot afford to become a charity. The problem is you're "shooting the messenger", all these companies do is source wholesale gas and bung a bill through your door. There are issues with supply and storage now that the UK cannot live off its domestic supplies, but simply nationalising British Gas isn't going to solve the problem, it isn't going to bring the North Sea back to life. Let's do the sums, £166m residential profit divided by ~30m households, so each household would benefit to the tune of £5 so far this year if the government "went after them". We have a problem of too much paper money chasing finite and diminishing resources, the best thing the government can do to help solve this problem is to stop printing money to bail out banks! Edited August 1, 2008 by sillybear2 Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted August 1, 2008 Share Posted August 1, 2008 £922m is the total profit, down about -20% compared to the same period last year. The UK household supply business saw a profit of £166m, 69% down from a profit of £533m last year, so they were making far more money last year when prices were lower. That's why their large increase for some tariffs isn't about pure profiteering or kicking people where it hurts at it may first appear. Given wholesale gas prices without the increases their residential business would become loss making, and given the poor performance of their share price obviously they cannot afford to become a charity.The problem is you're "shooting the messenger", all these companies do is source wholesale gas and bung a bill through your door. There are issues with supply and storage now that the UK cannot live off its domestic supplies, but simply nationalising British Gas isn't going to solve the problem, it isn't going to bring the North Sea back to life. Let's do the sums, £166m residential profit divided by ~30m households, so each household would benefit to the tune of £5 a year if the government "went after them". We have a problem of too much paper money chasing finite and diminishing resources, the best thing the government can do help solve this problem is to stop printing money to bail out banks! Agreed residential customers are not their money spinner,its commercial where they really cream it.As an ex restaraunter I now that first hand. Also agreed its too late to renationalise, but that doesn't stop me having an opinion it should never have been privatised and it hs failed the general public. The last point, well the government are the banks and vice versa so I guess its just typical labour ending up in tears as usual. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted August 1, 2008 Share Posted August 1, 2008 Feck me you might be onto something there. Cows with bags attached to their ar$es. Then take to a big container and store it,then sell it on. It's been done Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted August 1, 2008 Share Posted August 1, 2008 Also agreed its too late to renationalise, but that doesn't stop me having an opinion it should never have been privatised and it hs failed the general public. Deregulation and privatisation of energy markets has been a near universal failure, not only in the UK but pretty much everywhere it has been tried. A bit like farm collectivisation in Communist countries, no one is allowed to state in public that market solutions don't work as well as designed-by-engineer solutions for this sector. The purpose of the energy sector as a whole is to provide cheap, plentiful and reliable energy to the rest of the economy for a country on multi-decadal timescales. Markets focus on 'cheap' and 'timescales of a few years', leading very quickly to shortages, price spikes and reliability issues; they have no choice, being that any market participant that makes the long term a priority will be outcompeted in the short term by a participant that slashes investment and maintanance. Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted August 1, 2008 Share Posted August 1, 2008 Deregulation and privatisation of energy markets has been a near universal failure, not only in the UK but pretty much everywhere it has been tried. A bit like farm collectivisation in Communist countries, no one is allowed to state in public that market solutions don't work as well as designed-by-engineer solutions for this sector. The purpose of the energy sector as a whole is to provide cheap, plentiful and reliable energy to the rest of the economy for a country on multi-decadal timescales. Markets focus on 'cheap' and 'timescales of a few years', leading very quickly to shortages, price spikes and reliability issues; they have no choice, being that any market participant that makes the long term a priority will be outcompeted in the short term by a participant that slashes investment and maintanance. 100% agree France is a good example of a mixed economy but centrally planned (with some market influence) energy sector - for security and strategic reasoning I believe. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted August 1, 2008 Share Posted August 1, 2008 Src: BERR, UK Energy in Brief, July 2008 Quote Link to comment Share on other sites More sharing options...
Tummybanana Posted August 1, 2008 Share Posted August 1, 2008 Far as I can work out, with the advent of Sovereign Wealth funds the only difference between nationalisation and privatisation is that now I'm paying the French government to heat my house instead of the British one; France apparently owning 85% of EDF. SO instead of those profits being used to support UK taxpayers, they're used to support lobbying interests against the CAP and defend the right of rubbish workers not to be sacked. (I realise that sounds highly xenophobic, and appreciate that the French government does many great humanitarian things, but I deliberately picked the ones that would irk traditional small-statists) Quote Link to comment Share on other sites More sharing options...
Jason Posted August 1, 2008 Share Posted August 1, 2008 So in recent years we have been importing and exporting gas at the same time, with the net balance increasingly being imports. Why would you import and export gas at the same time? Isn't gas gas? Or is it to do with massive swings in production levels ever month? Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted August 1, 2008 Share Posted August 1, 2008 (edited) So in recent years we have been importing and exporting gas at the same time, with the net balance increasingly being imports.Why would you import and export gas at the same time? Isn't gas gas? Or is it to do with massive swings in production levels ever month? I suspect the main reason is exports to Ireland as they are at the end of the line. We effectively import norwegian gas and export it to Ireland charging a transit charge for the use of our network. Also our storage facilities are so pi$$ poor I suspect we have to export cheap summer surplus gas and import expensive winter gas from the continent. You couldn't make it up. Another success notched up for liberalisation of energy markets Edited August 1, 2008 by Kurt Barlow Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted August 1, 2008 Share Posted August 1, 2008 So in recent years we have been importing and exporting gas at the same time, with the net balance increasingly being imports.Why would you import and export gas at the same time? Isn't gas gas? Or is it to do with massive swings in production levels ever month? What Kurt said. It's even possible that we're buying back the same gas we've exported, but at higher prices, due to the UK's relatively low storage capacity. Quote Link to comment Share on other sites More sharing options...
SPEN555 Posted August 1, 2008 Share Posted August 1, 2008 More worrying is the rate at which the reserves is falling at! If I am reading the graph right in the next decade? there will be no debate about gas prices as it will be all gone. So take Cells advice and get the wood burning stoves etc. When I buy my house I am certainly going to look into solar/wind devices which can reduce my reliance on Gas for heating even if it costs £k's as things are only gonna get worse as the UK cannot control the prices no matter what we do. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted August 1, 2008 Share Posted August 1, 2008 More worrying is the rate at which the reserves is falling at!If I am reading the graph right in the next decade? there will be no debate about gas prices as it will be all gone. IIRC the UK is forecast to be importing 80-90% of its natural gas requirements by 2015 - less than seven years from now. Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted August 1, 2008 Share Posted August 1, 2008 More worrying is the rate at which the reserves is falling at!If I am reading the graph right in the next decade? there will be no debate about gas prices as it will be all gone. So take Cells advice and get the wood burning stoves etc. When I buy my house I am certainly going to look into solar/wind devices which can reduce my reliance on Gas for heating even if it costs £k's as things are only gonna get worse as the UK cannot control the prices no matter what we do. Wood burning stoves was my advice ! His advice was put another jumper on and joyfully pay any increase they have because they're are a company and should make huge profits,so feck the poor and elderly get them to run on the spot if they're cold. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted August 1, 2008 Share Posted August 1, 2008 Why would you import and export gas at the same time? Isn't gas gas? Or is it to do with massive swings in production levels ever month? Because we don't store it, so we export it in the summer and then re-import it in the winter at an inflated price. Quote Link to comment Share on other sites More sharing options...
cells Posted August 1, 2008 Share Posted August 1, 2008 Because we don't store it, so we export it in the summer and then re-import it in the winter at an inflated price. the cost to store it is greater than the price differential else it would be done Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted August 1, 2008 Share Posted August 1, 2008 More worrying is the rate at which the reserves is falling at!If I am reading the graph right in the next decade? there will be no debate about gas prices as it will be all gone. So take Cells advice and get the wood burning stoves etc. When I buy my house I am certainly going to look into solar/wind devices which can reduce my reliance on Gas for heating even if it costs £k's as things are only gonna get worse as the UK cannot control the prices no matter what we do. Best first options are insulation - upto 500mm in the loft, insulate the walls. Condensing boilers. Also consider secondary glazing to effective triple glaze windows Solar thermal is good - especially if you can do the work DIY. Solar PV is pricey and only worth it if you anticipate needing an emergency supply. Don't bother with wind if you live in a suburban / urban area or close to trees. Wind turbulence will make the turbine useless - a chocolate teapot - and an expensive one at that. Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted August 1, 2008 Share Posted August 1, 2008 So its headlines today what I thought yesterday, a call for a windfall tax on these utilities. So Cells, it would appear that a lot of people will be getting your stupid medal except you ! And it would appear Sillybear that BG's profits ARE a billion and people are angered by it and their 33 % price rise, are they all 6th form students with unworkable communist values as well ? Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted August 1, 2008 Share Posted August 1, 2008 (edited) So its headlines today what I thought yesterday, a call for a windfall tax on these utilities. So Cells, it would appear that a lot of people will be getting your stupid medal except you ! And it would appear Sillybear that BG's profits ARE a billion and people are angered by it and their 33 % price rise, are they all 6th form students with unworkable communist values as well ? Yes they are, comments like tax the rich fail to realise that people can and will leave. Even politicians do not understand sometimes like the whiskey tax hike not realising that the price elasticity meant that price rises reduced consumption which lowered revenue. Its like people saying petrol is expensive , while throwing pint after pint of beer (which is 600% more expensive per litre) down their throats. Or drinking bottled water which is about the same cost as petrol. Have you ever done a class in economics I remember my teacher very well , she spent the first 3 hours asking what companies ought to do , if situation X or Y happens. Using basic economic graphs of supply and demand she annilated our views on things. Ie this factory is losing £5000 a day what should they do? , most people said shut down , but this forgets fixed costs which means shutting down resulted in an even bigger loss. EDIT 2 Just because a large number of people agree on something doesn't mean that is actually right, I'll use the greap leap forward famine example again people agreed to over estimate grain supply to the communist party officials , result was millions died of hunger. Or the way millions of people said Iraq had WMD, they were wrong, Or the way that millions of people voted Blair cus they thought he was something better , they were way wrong, If you can go against the flow all the more power to you. Edited August 1, 2008 by kennichi Quote Link to comment Share on other sites More sharing options...
Guest barebear Posted August 1, 2008 Share Posted August 1, 2008 Yes they are, comments like tax the rich fail to realise that people can and will leave.Even politicians do not understand sometimes like the whiskey tax hike not realising that the price elasticity meant that price rises reduced consumption which lowered revenue. Its like people saying petrol is expensive , while throwing pint after pint of beer (which is 600% more expensive per litre) down their throats. Or drinking bottled water which is about the same cost as petrol. Have you ever done a class in economics I remember my teacher very well , she spent the first 3 hours asking what companies ought to do , if situation X or Y happens. Using basic economic graphs of supply and demand she annilated our views on things. Ie this factory is losing £5000 a day what should they do? , most people said shut down , but this forgets fixed costs which means shutting down resulted in an even bigger loss. And your point is ? Quote Link to comment Share on other sites More sharing options...
Prophet_of_Pwnage Posted August 1, 2008 Share Posted August 1, 2008 Sorry Cells, I do respect your opinion on here most of the time and you usually make good posts, but this time you're barking up the wrong tree with this start your own gas company thing. You started with a fallacious argument (essentially "owning a utility company can't be profitable, otherwise you'd be able to get a loan with a good business plan, or rich people/companies would do it") and have descended into posting pictures of cows farting when you've run out of responses. Weak i'm afraid to say. The reason why rich people/companies dont start utility companies, and also the reason why the bank wouldnt loan you the money is not because established utility companies aren't profitable (they are), it's because starting one up would not be profitable. As someone already correctly mentioned, its about critical mass or more specifically customer base. If you're an established utility company with an established customer base it is very proftable (£800m or whatever isn't small change), however 99.9999% of start ups would never be able to attract enough customers within enough years to move into profit in a feasable timescale, they'd lose far too much in the early years. The only exception may be companies with strong enough branding and who's brand strategy allows credible diversity into such things (i.e. budweiser have a strong brand but wouldn't start a utility company, it's just not what they do) - e.g. Virgin, as they did in the mobile phone market . Quote Link to comment Share on other sites More sharing options...
huw Posted August 1, 2008 Share Posted August 1, 2008 IIRC the UK is forecast to be importing 80-90% of its natural gas requirements by 2015 - less than seven years from now. And it's not clear how we'll be able to pay whatever level the prices have reached by then. What we need is to work towards energy security, not windfall taxes to fund consumption-as-usual. I'm not against windfall taxes per-se, but the money needs to be invested (whether by the public or private sector) for future winters, not squandered on staying warm for one more winter. Quote Link to comment Share on other sites More sharing options...
huw Posted August 1, 2008 Share Posted August 1, 2008 Sorry Cells, I do respect your opinion on here most of the time and you usually make good posts, but this time you're barking up the wrong tree with this start your own gas company thing. The detail of his argument is fallacious (and possibly facaetious) but practically, any of us can gain exposure to a gas company by buying its publicly traded shares. If the shareholders are getting such a good deal ... join them (and begin worrying about windfall taxes ) Quote Link to comment Share on other sites More sharing options...
Leroast Posted August 1, 2008 Share Posted August 1, 2008 According to an article by a former Indian ambassador, M K Bhadrakumar, Gazprom has signed two major agreements in Ashgabat, Turkmenistan which secures Russian control of Turkmen gas. This has significant implications for Western energy security - the US "has suffered a huge defeat in the race for Caspian gas." Curiously, the agreements reached..are unlikely to enable Gazprom to make revenue from reselling Turkmen gas. Quite possibly, Gazprom may now have to concede similar terms to Kazakhstan and Uzbekistan, the two other major gas producing countries in Central Asia. In other words, plain money-making was not the motivation for Gazprom. The Kremlin has a grand strategy.Coincidence or not, Russian Deputy Prime Minister Igor Sechin traveled to Beijing at the weekend to launch with his Chinese counterpart, Vice Premier Wang Oishan, an energy initiative - a so-called "energy negotiation mechanism".... ...In sum, Russia has greatly strengthened its standing as the principal gas supplier to Europe. It not only controls Central Asia's gas exports but has ensured that gas from the region passes across Russia and not through the alternative trans-Caspian pipelines mooted by the US and EU. Also, a defining moment has come. The era of cheap gas is ending. Other gas exporters will cite the precedent of the price for Turkmen gas. European companies cannot match Gazprom's muscle. Azerbaijan becomes a test case. Equally, Russia places itself in a commanding position to influence the price of gas in the world market. A gas cartel is surely in the making. The geopolitical implications are simply profound for the US. Quote Link to comment Share on other sites More sharing options...
huw Posted August 1, 2008 Share Posted August 1, 2008 It helps reduce demand spikes as most of their output is fixed. You opt for one tariff and pay accordingly. So you have some kind of trip device that cuts out if you go above the rated demand? Or do you get pushed to a penalty tariff? Seems like an excellent idea either way, and presumably quite cheap to implement. Quote Link to comment Share on other sites More sharing options...
Kurt Barlow Posted August 1, 2008 Share Posted August 1, 2008 And it's not clear how we'll be able to pay whatever level the prices have reached by then.What we need is to work towards energy security, not windfall taxes to fund consumption-as-usual. I'm not against windfall taxes per-se, but the money needs to be invested (whether by the public or private sector) for future winters, not squandered on staying warm for one more winter. 100% agree Action needed at all levels. Individuals, organisations and government. BTW Huw - Im looking into stoves right now but the flue costs are astronomical - with a decent stove DIY is £2800 Im thinking as an alternative about buying secondary glazing units to upgrade to triple. Quote Link to comment Share on other sites More sharing options...
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