Tuesday, January 9, 2007

Regurgitated gas:

Here's Malcolm, last November 17th on "Unnatural gas":
...the price of domestic gas and electricity shows little sign of reducing. We are now paying 90% more for gas, and 60% more for electricity than 2003. There are further price increases due in the near future. Scottish and Southern is upping tariffs next January by 12.1% for gas and 9.4% for electricity. In the name of all decency, why?

Last January, the wholesale price of gas was 71.25p per therm: this year it is being offered at 61.7p (a fall of nearly 15%). The “spot” price is just over 40p per therm (half the peak price reached last Spring), though this is not significant because most suppliers are locked into long-term contracts. However, suppliers, to justify price increases, repeatedly quoted the “spot” price.
And, strictly for comparison, here is the second leader, "Flagging Energy", in today's Times:
While wholesale gas prices have fallen by about 40 per cent in the past six months, householders’ bills have risen an average of 30 per cent in that time. Average gas bills have risen by 94 per cent in three years and electricity bills by 60 per cent, pushing the average household into paying more than £1,000 a year for energy.

What is going on? Only last month Ofgem, the energy regulator, warned Britain's gas suppliers not to “keep jam on their fingers” by failing to pass on falling costs to consumers, and theatening to use its powers to fine them. There is typically a lag in price changes being passed on, since energy companies tend to pay at least three months in advance for their supplies. But wholesale gas prices have been falling for longer that that, and the retail price seems to be heading in quite the opposite direction. Four gas companies raised their prices again on January 1, in some cases because capped deals expired.
Remember, you read it here first. Sphere: Related Content

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