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Knew he would get this one wrong

Earlier this year I wrote a Twitter thread explaining why the profits of energy companies would rise dramatically this year as a result of the fuel price increases resulting from the Ukraine war.

The reality is that the profits have not increased by as much as I predicted. I have a very strong feeling that energy companies will at this moment be booking every loss that they can find within their companies in a desperate attempt to disguise the scale to which they are benefitting as a result of war and the exploitation of people around the world.

Well, yes, at which point he looks at BPs profits.

There is blatant profiteering going on here. War is being exploited and as a consequence people will die. In the meantime shareholders will laugh all the way to the bank, investment in fossil fuels will rise and the planet will burn.

What to do? I thought a tax would help. I still think it might. But the rate has to be close to 100%. This is what wartime situations demand when exploitation happens. Just read Keynes on the issue, writing in WW2.

It is also, you know, maybe, possible to actually look at the results announced:

So far this year BP has dropped over $10 billion of shareholders’ money. That’s the cost of writing down the investment in Rosneft. That’s still net down $10 billion on the half year.

So, how much you gonna tax a company losing money, Spuddo?

The alternative is price capping. The government has to impose price limits. And if the energy companies withdraw fuel from the UK market as a result it will be clear who is causing this.

Facepalm. What happens to prices at that point?

20 thoughts on “Knew he would get this one wrong”

  1. Since the sanctions seem to be hurting the West more than Russia, I’d abolish them. And start up a crash program of fracking immediately.

    But I’m a selfish bloke at the best of times. And even more so when things get worse.

  2. Indeed – there’s some very bright Russian engineers extracting and cleaning gas to be sold to us. We want them to do that, and for future bright engineers to do that, so we need to buy their stuff to incentivise that.
    We don’t want clever Sergeis buggering off and working on artillery detection instead. We don’t benefit from that.

  3. Go read the comments in any BBC “Have Your Say” on the energy company profits. Almost every fuckwit commenting wants some combination of:

    1) Government assistance with their bills.
    2) The companies to have their profits stolen from them.
    3) Nationalisation of the industry.

    Where

    1) Presumably with money taken from the “rich” – i.e. not them.
    2) From the “rich” shareholders (boomer pensioners and the like).
    3) So the government can make things worse having already contributed significantly to the problem through stupid energy policies, the hopeless Ofgem and other interference in the market.

    How would one address the problem with the herd can’t even understand the issues causing the problem?

  4. Boganboy – sanctions have backfired worse than anything Wily E Coyote purchased from the Acme catalogue, so naturally they’re looking to double down with more sanctions, on China this time.

    That’s the purpose of Mrs Pelosi’s bogus journey to Taipei, provoke the Chinee and then slap them with sanctions. China has already been designated the US’s Next Top Enemy, poking them in the balls is about getting them to provide a pretext for American aggression. The USS Ronald Reagan is loitering in the vicinity to make sure Peking gets the message.

    It may soon be time for NPC’s to add Taiwanese flags to their social media avatars and get ostentatiously angry about the Yellow Peril’s Insidious Threat To Our Sacred Democracy. Slava Chineasy!

  5. It’s already giving you something to be insanely whiny about, Steve, so at least we’ll have a bit of novelty.

  6. PJF – sure, but not sure there’s a purpose to caring (or pretending to care) more about Chinese democracy and human rights than Chinamen do.

    Do you ever wonder why it’s ok to criticise our political leaders’ insane, malicious, dopey domestic policies but not ok to criticise their insane, dopey, malicious foreign policies?

    It’s the same circus, with the same clowns. The Face Eating Leopard Party doesn’t magically start doing things for our benefit when they go overseas.

  7. The alternative is price capping. The government has to impose price limits. And if the energy companies withdraw fuel from the UK market as a result it will be clear who is causing this.

    Been there, done that. Don’t want to sit in gas lines again. You think they would have learned something from Jimmy Carter. Kids these days!

  8. “sanctions have backfired worse than anything Wily E Coyote purchased from the Acme catalogue”

    There’s a company locally that provides props to the film industry and is called Acme, their logo is an anvil, clearly the founder had a sense of humour.

  9. Can you splain me now?

    《1) Government assistance with their bills.》

    《1) Presumably with money taken from the “rich” – i.e. not them.》

    What are the downsides of just printing and inflation-proofing (i.e. indexation) the money?

  10. Just to show we can be just as stupid down here in Oz as you northerners, there is at present a strong push for the wicked gas producers of Queensland to make sure the domestic market is supplied at the expense of their export contracts.

    I’d have some sympathy for this one. Except that New South Wales and Victoria have long since forbidden the hideous raping of Holy Mother Gaia that is required to produce the gas. Indeed they are staunch Greens and wish abolish all the horrid CO2-producing fuels. Except when they run short, of course.

  11. Do you ever wonder why it’s ok to criticise our political leaders’ insane, malicious, dopey domestic policies but not ok to criticise their insane, dopey, malicious foreign policies?

    Who said it’s not ok? And you’re begging the question; not everyone has the same opinion on government policies, foreign or domestic.

    I happen to think it is extremely stupid to have normal trading relations with nations / regimes that are obviously hostile to our interests. I also think it is stupid to carry on with those relations once the consequences of them are obvious. I’m not in the “it’s all our fault” camp, and I am not of the anti-American right.

  12. Sanctions are rather buggering Russian industry and hence their ability to sustain their war. This is a Good Thing.

  13. It’s same as attack by msm, inc GB News, on Centrica profits

    Let’s assume Centrica has 12 million customers, inc industrial. If avg bill is £2,000 that’s £100 profit per customer – 5%. Not expoitive and evil

    It’s same when Tesco annouce profit, no though given to avg profit per shop

    Always blinkered ‘Big number bad’

  14. Can you raise my prices now?

    Isn’t the real problem here that enclosure allows private companies to sit on supplies to raise prices?

    Is “market efficiency” just code for “whatever’s convenient for a few price setters with state-granted monopolies”?

  15. sit on supplies to raise prices?

    If this were true, then inventories would be rising, and storage capacity would be either maxed out, or in short supply – which would raise the price of storage, reducing the profit at the pump. As the boy Pirrong has pointed out, this isn’t happening.

  16. @ Can you splain me now?

    Q: “What are the downsides of just printing and inflation-proofing (i.e. indexation) the money?”

    A: It won’t work.

  17. @Pcar

    More relevant is British Gas, as Centrica owns lots of other companies as well, some abroad. BG’s profit last year was £118 million last year. They have about ten million customers. So if all that profit was taxed and given to the customers who are facing a rise in energy bills of £1500, they would each get £11.80. Don’t spend it all at once!

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