Gas wholesale prices have dropped 70%

[ivykaty44]

In 4 months going into winter, so why haven’t prices dropped?

in august a therm was 500 but by December a therm us 155

yet we are still paying astronomical prices each month in our direct debits

it’s surely unreasonable that prices haven’t dropped
why isn’t MSM reporting massive price drop?

Partially It’s the way ofgem has set the price cap. the UK’s tariff cap is backwards looking.

When the price cap is set in the UK it considers the historic price of gas on the commodity market. A couple of ofgem directors resigned as they said it was the wrong way to do it, for gas retailers and customers.it encouraged risky behaviour from gas retailers.

the hedging and forward buying all contribute to how much gas companies are buying the wholesale gas for.

in short a drop 8n commodity prices will take a while to pass through to consuners. The market also remains v v volatile. You need to look at forward prices, they are still high. Not insanely high as they were but no where nea4 what used to be considered normal.

This is interesting, except:

www.huffingtonpost.co.uk/entry/why-are-shell-oil-and-gas-profits-high-energy-crisis_uk_635a39a5e4b0cf522df4ef23

It CAN'T be right that they are making record profits while people are dying through lack of heating. I'm in favour of Labour's Great British Energy plan. The market has made enough money off people's lives this year.

@SallyLockheart I can't recall, but it was at 70p back in March 2022.

This!

@WoolyMammoth55 It's because the likes of Shell and BP are selling the stuff (so record profits because they're able to sell at a very high price due to restriction in the market caused by the Ukraine war and demand for gas from China post-pandemic amongst other reasons). And the likes of Octopus and other 'retail' energy companies buy it (at the higher price) to pass on to you and me

@WoolyMammoth55 it’s the difference between the wholesale sellers of gas, that are worldwide comps selling everywhere, and the U.K. buys from lots of places too….and the retailer to you and me who aren’t making huge profits.

they could put a windfall tax on the wholesalers and should, and use that money to subsidise people who need hel0 with bills.

@BarrelOfOtters but the thing is that after our energy went bust last year, we were reassigned to be customers of - SHELL ENERGY.

So they are certainly retailing as well as wholesaling.

The whole thing is pretty grotesque IMHO.

Agree with a pp that you should windfall tax the wholesalers though. No one should be making bumper profits because putin has fucking invaded ukraine and rammed up the global oil & gas prices.

Oil heating is nearly always more expensive than gas and on top of that has no price cap.

I suspect the number of people who prefer to use oil when they have access to mains gas is negligible.

Agree @GasPanic, back in Sept the DfE announced caps for school electric and gas, no mention of oil.

Let's think now DfE, how many of your older schools are still on oil boilers...

It is scandalous that energy companies are profiting from war. They should be taxed up the ying yang.

Agree with a pp that you should windfall tax the wholesalers though. No one should be making bumper profits because putin has fucking invaded ukraine and rammed up the global oil & gas prices.

There is a windfall tax, which has recently been extended. Even then, it's not entirely straightforward as BP and Shell are multinationals with operations and revenue in multiple countries.

The U.K. has also benefitted from Shell relocating its HQ from the Netherlands to London recently. There's a balancing act between trying to implement further windfall taxes and making the U.K. a punitive location for corporations.

If you want to blame anyone, set your sights on OPEC (and Putin as you say).