Well, no, not really

Energy companies, a poll showed this week, are now even more detested than the banks. And no wonder. As we reported yesterday, their profits have soared by 50 per cent per household due to falling gas prices, since – on top of all their other sins – they have failed to pass on the benefits to their customers. It’s been calculated that the average annual bill would be lowered by £140 if they reflected all these savings; instead, measly recent cuts have only reduced them by between £9 and £35, depending on the miserliness of the company.

A little over a year ago the Big Six were telling everyone who would listen that “green taxes” were responsible for their high prices. Many, if not this column, swallowed the lie. Their number included the Prime Minister, who reputedly vowed to cut the “green crap”; in practice this meant slashing the only programme that helped poor people reduce their bills.

The energy companies offer fixed price deals. This means that they buy their supplies forward. Meaning that much of what is currently passing through the pipes was bought at the old higher prices.

And recall that Miliboy said that he was going to make them cut their prices? Meaning that they had to buy forward in order to protect against upside risk?

8 thoughts on “Well, no, not really”

  1. Yes, energy companies buy forward. They also sell forward, something apologists never mention, nor their trading desks to churn their positions.

  2. Well some of their costs will be falling. The Russians insisted gas prices be tied to the oil price. Haha!

  3. And some of their costs will probably rise. For some reason Russia supplies gas to a bunch of countries…

  4. £140 sounds like about 10% of a typical bill. What’s been the fall in gas prices? Aka what portion of a bill is actually due to the raw material?

    How much does this resemble petrol prices where a collapse in the price of oil, even passed on in its entirety, only knocks 10-20% off the pump tally?

  5. The Energy companies are being set up to take the rap for the total bollocks the Department of Energy and Climate Change, (FFS!) has made of energy supplies and prices with the incredibly, stupidly hubristic Climate Change Act. (FFFS!!)

    Kill every human on this little island and all our domestic animals too; bury the whole lot in the evil coal mines we’ve raped poor Gaia with; seal them over and plant the whole place with trees; and the difference the whole evil process will make to the climate of our poor fragile planet, (now, in a hundred years or ever), will be abso-fucking-lutely fucking fuck all,

    Sorry about that.

    The fact that the energy companies are such a sorry bunch of corporatist parasites whose craven obsequiousness in the face of this outrage will only make it easier for the politicians and bureaucrats who cobbled together this pathetic excuse for an energy policy to slither out from under the blame and escape their righteous punishment, only makes it worse.

    Nurse! Pass the Ramipril! Stat!

  6. SCENE: The Old West–two armed desperados leap aboard a slow-moving ornate steam trade.

    Voiceover: Folksey and down-homespun

    “Hannibal Hagues and Ed “Kid” Milly–two of the most notorious outlaws of the Old West.

    “And in all the banks and energy companies they robbed, they never shot anyone (apart from 1000s of mid-easterners) which made our two latterday Robin Hoods very popular with themselves and the terminally stupid.

    Alias Millimong and Camorgueron–coming to BBC2 soon–Monday night at 9 (right after Ask The Family)”

  7. “And recall that Miliboy said that he was going to make them cut their prices? ”

    I was under the impression he was going to make them freeze them (hence the photo-opportunities with huge ‘ice-cubes’ with bills in them.)

    Furious back-peddling ensued when the price of energy did fall and “no – we didn’t mean freeze, we meant cap” to the sound of goalposts whooshing around.

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