Wholesale energy costs at their lowest in 18 months...we are being completely ripped off!

I await a defence from fair on here to say how poor these energy companies are and how they have little money.
 
There is an element that I dont understand about this energy crisis.
I have moved to a new house and not set up a DD. I am therefore paying monthly. I either submit a meter reading or they provide an estimate.
On the 1st April I turned down the thermostat and have turned off the central heating as it has got warmer.
My gas usage has been negligible in that time. So the gas bills have come right down. It obviously will go up in the Autumn/Winter but at the moment I am benefitting.
I am not surprised why there is a surplus of gas, as surely we dont use as much in the summer.
I appreciate that using a DD evens out the effect over the year, but I am happy to take my chance when the next price hike comes.
 
Boro in Devon said:
There is an element that I dont understand about this energy crisis.
I have moved to a new house and not set up a DD. I am therefore paying monthly. I either submit a meter reading or they provide an estimate.
On the 1st April I turned down the thermostat and have turned off the central heating as it has got warmer.
My gas usage has been negligible in that time. So the gas bills have come right down. It obviously will go up in the Autumn/Winter but at the moment I am benefitting.
I am not surprised why there is a surplus of gas, as surely we dont use as much in the summer.
I appreciate that using a DD evens out the effect over the year, but I am happy to take my chance when the next price hike comes.
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What is it you don't understand?

You are not really benefitting. You are still paying a much higher standing charge than you were. And not paying for something you aren't using can't really be termed a benefit. This is like saying 'I'm benefitting from the falling price of a Rolls Royce even though I don't own one, and they are still charging me daily for looking at the catalogue'.
 
Who would've thought that removing all of our ability to store gas was a bad idea?

Just in time supply is basically just in time to make the most profits. Screw consumers.
 
sherlock1969 said:
What is it you don't understand?

You are not really benefitting. You are still paying a much higher standing charge than you were. And not paying for something you aren't using can't really be termed a benefit. This is like saying 'I'm benefitting from the falling price of a Rolls Royce even though I don't own one, and they are still charging me daily for looking at the catalogue'.
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I am not saying that I am benefitting, and I do understand the standing charge.

What I am struggling with is the reaction to the prices of gas (not standing charge) going up at a time when we are using less gas, due to it being summer. I know it is going to hurt next winter, but it isnt now if you dont pay by DD.
 
Boro in Devon said:
I am not saying that I am benefitting, and I do understand the standing charge.

What I am struggling with is the reaction to the prices of gas (not standing charge) going up at a time when we are using less gas, due to it being summer. I know it is going to hurt next winter, but it isnt now if you dont pay by DD.
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Of course it is. The amount people actually use and pay over the year will still be the same. DD customers will just pre-pay for some of their winter usage.

In fact, most companies offer a discount for paying by DD so you are actually incurring higher costs over the course of the year.
 
gizboro68 said:
Maybe trying to appease the green lobby?
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Nothing to do with that, they just didn't want the costs of maintaining storage and opted to just pass on any wholesale rises straight to the consumer instead.

The problem with that is why so many energy companies went bust, which is another cost pushed onto us all.
 
Wholesale prices shot up in late 2021 and early 2022, they have declined since but not back to say prices in 2020.

When whole sale prices shot up domestic consumers were protected from large price increases until April 2022.

I am not saying prices are correct now, but they had to rise to some degree.

The UK has high energy prices in part because of green taxes which exist to provide subsidies to say solar energy/solar panel owners. High UK energy prices came to light in 2015 when SSI was shut down, it biggest bill was energy and could not compete even with German producers because their energy costs were lower.
 
sherlock1969 said:
While wholesale energy prices plummet, bills go up and Ofgem are supporting providers in ensuring prices can't fall in future. No wonder Martin Lewis is fuming.

This thread is an interesting, if infuriating, read:

https://twitter.com/x/status/1526461582850543621
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Read the language behind the new proposed changes to the cap. Its not just to pass savings on quickly, it's also to allow companies to recoup losses. Essentially they are refusing to take a loss and milking us before bringing it down a fraction and expecting us to accept it as a new normal.
 
Redwurzel said:
Wholesale prices shot up in late 2021 and early 2022, they have declined since but not back to say prices in 2020.

When whole sale prices shot up domestic consumers were protected from large price increases until April 2022.

I am not saying prices are correct now, but they had to rise to some degree.

The UK has high energy prices in part because of green taxes which exist to provide subsidies to say solar energy/solar panel owners. High UK energy prices came to light in 2015 when SSI was shut down, it biggest bill was energy and could not compete even with German producers because their energy costs were lower.
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However you look at it though, there is absolutely nothing that justifies another 40% increase in October.

There is also no excuse for Ofgem's latest measures that guarantee that no firm will be able to lower prices for customers.
 
You have to remember, this is the price of gas to be delivered tomorrow. That's only any use to you if you know there's going to be a significant current demand for it, or if you've got sufficient capacity to store it until later in the year.

As it's approaching summer, the current usage of gas is very low and, as we all know, the government took the sensible and far-sighted decision to close our main storage facility five years ago. Therefore, because current usage is low and storage practically non-existent, the price for delivery tomorrow is also very low.

If you remember during the early stages of the pandemic, the spot price of US crude oil went negative for a while, as there was literally no demand and it was more worthwhile for dealers to pay someone to take it off their hands, rather than incur the costs of receiving and storing it.

When we all want to use gas, however, is during late autumn and winter, starting about 6 months from now. The price for delivery in 6 months' time reflects the fact that the whole of Europe will want supplying with more gas then, so is much, much higher.

That said, I agree entirely with the comments regarding the ridiculous decision to close the storage facility, which has exposed all of us to the extremes and volatility of the market for something which is essential. Markets only really provide a solution for goods/services which involve discretionary spend. Life's essentials require heavy regulation and central planning.
 
Chris_Boro said:
Nothing to do with that, they just didn't want the costs of maintaining storage and opted to just pass on any wholesale rises straight to the consumer instead.

The problem with that is why so many energy companies went bust, which is another cost pushed onto us all.
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25% of our electric bills are green levys,so not too much of a stretch of the imagination to believe a lack of gas storage facilities is down to the powerful green lobby!
 
Billy Horner said:
You have to remember, this is the price of gas to be delivered tomorrow. That's only any use to you if you know there's going to be a significant current demand for it, or if you've got sufficient capacity to store it until later in the year.

As it's approaching summer, the current usage of gas is very low and, as we all know, the government took the sensible and far-sighted decision to close our main storage facility five years ago. Therefore, because current usage is low and storage practically non-existent, the price for delivery tomorrow is also very low.

If you remember during the early stages of the pandemic, the spot price of US crude oil went negative for a while, as there was literally no demand and it was more worthwhile for dealers to pay someone to take it off their hands, rather than incur the costs of receiving and storing it.

When we all want to use gas, however, is during late autumn and winter, starting about 6 months from now. The price for delivery in 6 months' time reflects the fact that the whole of Europe will want supplying with more gas then, so is much, much higher.

That said, I agree entirely with the comments regarding the ridiculous decision to close the storage facility, which has exposed all of us to the extremes and volatility of the market for something which is essential. Markets only really provide a solution for goods/services which involve discretionary spend. Life's essentials require heavy regulation and central planning.
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Coincidental how the pricing model allows the energy providers to extract maximum profits at all times though huh?
 
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