Energy Prices

Andy_W

Well-known member
I get that selling at a loss is a no brainer, but how do they know what the future prices are? It seems to me like a licence to print money and falsely inflate an already over expensive market or I am missing something? What incentive is there for the market prices to come down of they are always based on a future market and an opinion and not based on an actual?
They can predict demand very accurately for normal times (pandemics and wars can alter this of course), when they get it wrong they're normally predicting it under what it costs, not over and hence why the energy providers go under. It's normally the smaller companies going under, as it's those offering the best rates in most cases, then when the price goes up they go under. When the cap comes down another load of energy companies will start up again, and they'll go under the next time there's a massive unexpected increase in demand/ cost. An example of this might be in the future if a large eruption massively reduces solar output, or a massive storm wipes out half of the wind turbines, and rips the solar from peoples roofs etc.

An unstable world economy will widen the error bars of the future prediction, so they probably air on the side of caution, which would be the right thing to do for economic stability (to a degree), as nobody wants a crisis far worse than what we're seeing now, and nobody wants an energy company monopoly either.

The cap is just that though, it's a cap, and once energy prices come down companies will come in under the cap and compete for your custom.

As soon as the war is over or an alternate energy source is found, then this would lower the predicted cost/ error bars, and then the cap would become lower, unless of cause the war was deemed "over" as Russia had been blown into next week. This would send rocketing prices as there then wouldn't be enough energy to fuel the world.
 

Andy_W

Well-known member
We need more reliable Nuclear and to up wind and solar generation as this will be needed for EV's and non-gas heating, but everyone wants to focus on the now.
I agree we need more nuclear, but that won't really help the prices much, as it's by far the most expensive form of energy provided, closely followed by offshore wind, and both are around 6-7x the price of Gas, normally. Obviously a lot of that cost goes on the construction/ manufacture/ wages/ distribution etc, but that's not a bad thing, as it's money going back into the economy/ tax coffers (eventually).

It's like with HS2 or any construction project etc, it's costing 100bn or whatever, but it's not 100bn up in smoke, most of that will be providing jobs, increasing companies turnover, spent on construction materials and fuel etc, so ends up being taxed numerous times. Before it might have been 50m out the door and 30m coming back in the door, but now it might be 100m out the door and 70m coming back in the door etc. In real terms it's a 10bn increase, not 50bn.

Solar's cheaper than gas, and onshore wind much cheaper than offshore, but people whinge about how they look, prioritising a view they see twice a year, over what's running the country and keeping people alive.

My tip to anyone would be don't ever complain about onshore wind and solar.
 
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Andy_W

Well-known member
Am i correct in thinking that the goverment is raking in a lot more in fuel duty when fuel prices rise to the consumer
They are raking more in, but the problem is inflation puts up costs to run the country too, so it's not really putting much of a dent in the deficit, and is probably costing us more than we're gaining.

Also, the heaviest fuel users will be claiming the VAT back, so it's only the other taxes which will be helping the "pot".

Inflation/ recessions etc saps profits too, so there's no tax on those, and then likely less "good jobs", so less tax on the higher earners etc.
 

InglebyUTB

Well-known member
Much of this has been caused by the West punching itself in the face with sanctions, our leaders tried to sanction Russian oil and inevitably we've ended up sanctioning ourselves.

Sanctions have pushed the price of oil up and Russia has been able to sell the oil at an inflated but discounted rate to China and India.

Result? Record Russian oil revenue.

Epic self harm.

 

Glover_elbow

Well-known member
absolutely!!
It makes no sense to keep fuel duty so high, when people cant afford to pay it.
Much of this has been caused by the West punching itself in the face with sanctions, our leaders tried to sanction Russian oil and inevitably we've ended up sanctioning ourselves.

Sanctions have pushed the price of oil up and Russia has been able to sell the oil at an inflated but discounted rate to China and India.

Result? Record Russian oil revenue.

Epic self harm.

i dont think boris and most of the torys see it as a problem if there is a great financial reset, in fact i think they actively want austerity 2, as they can manipulate their own financial positions and make the richest in society even wealthier. Not so much punching the west in the face as just the ordinary workers in the west.
 

Andy_W

Well-known member
Much of this has been caused by the West punching itself in the face with sanctions, our leaders tried to sanction Russian oil and inevitably we've ended up sanctioning ourselves.

Sanctions have pushed the price of oil up and Russia has been able to sell the oil at an inflated but discounted rate to China and India.

Result? Record Russian oil revenue.

Epic self harm.

Yup, I think they must have expected it though, but it was a problem which was going to occur sooner or later.

At least it will be a kick up the **** for us to become more self sufficient, as nobody will want to go down this road again, and long term it should mean becoming less reliant on Russia, which should also hurt them long term, more than they gain.

I don't think there's anywhere near the same capacity pipelines of oil or gas feeding india or china from Russia, and sending it by boat must cost a hell of a lot more? They might be raking more in, for now, but not sure if they would be making more, not with all the other sanctions, and 25% inflation in Russia, or whatever it is, and the negative growth.
 

1finny

Well-known member
Couldn’t agree more. I am sick and tired of the doom and gloom and nothing getting done about, we have the RAC banging on about £2 a litre petrol and then just accept profiteering from filling stations whilst shouting we told you this would happen. Same with the energy prices you have Martin Lewis shouting prices are going to double again but not offering any solution as to how to stop it as he’s not political. Inflation being out of control but rather than having a proper look at how to stop it rising we use the same old methods of not increasing wages in line with inflation and increasing the interest rate.

The country needs a massive overhaul both politically and economically.

can we jut stop spouting the government line of 'profiteering by filling stations'.

filling stations make between 3p and 7p per litre (always have done) - for that, they build petrol stations, man them and serve customers then, every 10 years or so have to spend circa £300k renewing the tanks
half of what you pay for a litre goes to the government - thats the key problem
then its the suppliers who are making billions in profit.
 
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Littlejimmy

Well-known member
Fuel prices can't just keep going up forever, but it seems to be never-ending. Every time I go to fill up it seems to be another 2p a litre expensive. Something has to give. It will become unaffordable and demand will crash. The government, meanwhile, are raking in VAT applied to fuel duty.
 

MolteniArcore

Well-known member
Much of this has been caused by the West punching itself in the face with sanctions, our leaders tried to sanction Russian oil and inevitably we've ended up sanctioning ourselves.

Sanctions have pushed the price of oil up and Russia has been able to sell the oil at an inflated but discounted rate to China and India.

Result? Record Russian oil revenue.

Epic self harm.


Said this at the start of the war. Now we are seeing strikes etc I wonder how long it will be before we decide to soften our stance on the sanctions to take the pressure off.
 

Pak_Doo_Ik

Well-known member
can we jut stop spouting the government line of 'profiteering by filling stations'.

filling stations make between 3p and 7p per litre (always have done) - for that, they build petrol stations, man them and serve customers then, every 10 years or so have to spend circa £300k renewing the tanks
half of what you pay for a litre goes to the government - thats the key problem
then its the suppliers who are making billions in profit.
Finny I agree about the government and nothing should distract from the amount of duty we pay but I can’t agree on the profiteering. A couple of weeks ago my filling station went up at least a penny a day for 4 consecutive days, they are a rural filling station so could not possibly had any deliveries that could have caused this. I always expect the local station to be more expensive than the bigger chains but it has now reached a disproportionate amount add to this when the 5p fuel duty cut came in they didn’t reduce the cost until they received there next delivery, so they can’t and shouldn’t be allowed to have it both ways.

I’m sure not every filling station is profiteering but as in any walk of business there are good and bad eggs, however to believe none are profiteering seems a bit far fetched.
 

1finny

Well-known member
Finny I agree about the government and nothing should distract from the amount of duty we pay but I can’t agree on the profiteering. A couple of weeks ago my filling station went up at least a penny a day for 4 consecutive days, they are a rural filling station so could not possibly had any deliveries that could have caused this. I always expect the local station to be more expensive than the bigger chains but it has now reached a disproportionate amount add to this when the 5p fuel duty cut came in they didn’t reduce the cost until they received there next delivery, so they can’t and shouldn’t be allowed to have it both ways.

I’m sure not every filling station is profiteering but as in any walk of business there are good and bad eggs, however to believe none are profiteering seems a bit far fetched.
Let’s do this properly.
What’s your experience here?
I run 7 petrol stations.
The cost price can go up daily.
As an example - when the 5p duty freeze was announced, the next day the wholesale price went up 5p.
So - when retail prices go up you neec to understand what’s happened to the cost price to retailers before you follow the government narrative of “profiteering filling stations’.
The public never came up with this on their own.

Sorry if I sound a bit asrey on this but I’ve had to explain this numerous times to customers who use that very
It does show you though what cut through this nonsense can have.
 

Funky_Chicken

Well-known member
Some people ( those with their fingers in the right pies ) are getting very rich off the back of other peoples misery - very nice, if your one of those with your finger in the pie
 

RedAsABeetroot

Well-known member
Who picks up the tab when the supply companies fail?

Either consumers, or the government. Either way we all end up paying for the energy we use.

What's needed is a much better thought out strategy where there is capacity to buy and store energy when wholesale prices are low and release it to the market when prices are high.
Doesn't this depend on the companies making profits and investing in storage facilities? Why would they when they seem to be able to hike the prices as much as they are now.
Utility companies are part of the basic fabric and infrastructure of a country and should be run as such not by foreign utility companies.
 

RedAsABeetroot

Well-known member
Weird today. I've lived in Coulby 25 yrs. The tesco filling station at the Parkway centre has always been at least 2 p a litre cheaper than the Tesco/Esso one at the Blue Bell. Never the other way around in 25 yrs.
Yesterday and this morning the Coulby one is 10p a litre dearer than the Blue Bell at £1.93 a litre compared to £1.83 a litre.
Are they offering £5 off when you spend £50 in the supermarket? I know they used to but I'm an Aldi convert now.
 

Pak_Doo_Ik

Well-known member
Let’s do this properly.
What’s your experience here?
I run 7 petrol stations.
The cost price can go up daily.
As an example - when the 5p duty freeze was announced, the next day the wholesale price went up 5p.
So - when retail prices go up you neec to understand what’s happened to the cost price to retailers before you follow the government narrative of “profiteering filling stations’.
The public never came up with this on their own.

Sorry if I sound a bit asrey on this but I’ve had to explain this numerous times to customers who use that very
It does show you though what cut through this nonsense can have.
Sorry mate but you said on here around the time of 5p cut that prices might not drop because retailers had already purchased their fuel and they paid for that delivery and the associated cost. Once it’s in the forecourt why does the price need to go up surely the filling station has paid whatever they need to pay for that fuel and the wholesale price change shouldn’t have any impact on fuel already purchased. I suppose they could be softening the blow and bringing in incremental price rises so that there isn’t a big hit when the wholesale price increase hits the next delivery???

I get why you’re being protective of the industry because it sounds like I’m lumping all petrol retailers together but I can only go on my experience of the filling station near me and maybe I’m missing the something.
 

thewanderer

Active member
I agree we need more nuclear, but that won't really help the prices much, as it's by far the most expensive form of energy provided, closely followed by offshore wind, and both are around 6-7x the price of Gas, normally. Obviously a lot of that cost goes on the construction/ manufacture/ wages/ distribution etc, but that's not a bad thing, as it's money going back into the economy/ tax coffers (eventually).

It's like with HS2 or any construction project etc, it's costing 100bn or whatever, but it's not 100bn up in smoke, most of that will be providing jobs, increasing companies turnover, spent on construction materials and fuel etc, so ends up being taxed numerous times. Before it might have been 50m out the door and 30m coming back in the door, but now it might be 100m out the door and 70m coming back in the door etc. In real terms it's a 10bn increase, not 50bn.

Solar's cheaper than gas, and onshore wind much cheaper than offshore, but people whinge about how they look, prioritising a view they see twice a year, over what's running the country and keeping people alive.

My tip to anyone would be don't ever complain about onshore wind and solar.
I think you mean least expensive.
 

thewanderer

Active member
Sorry mate but you said on here around the time of 5p cut that prices might not drop because retailers had already purchased their fuel and they paid for that delivery and the associated cost. Once it’s in the forecourt why does the price need to go up surely the filling station has paid whatever they need to pay for that fuel and the wholesale price change shouldn’t have any impact on fuel already purchased. I suppose they could be softening the blow and bringing in incremental price rises so that there isn’t a big hit when the wholesale price increase hits the next delivery???

I get why you’re being protective of the industry because it sounds like I’m lumping all petrol retailers together but I can only go on my experience of the filling station near me and maybe I’m missing the something.
Fuel retailers run at tiny margins, they usually supplement fuel sales with a convince store and car washes etc. Most of the cost you pay is wholesale costs and tax.
 
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