Explain in layman's terms the energy situation.

[Perfect28]

Is it that the energy companies hiked prices after market reaction to global events, and now the consumers are paying for their profits?

Given what has gone on these last few years, I am of the mind that our gov is simply emptying the till and giving all our tax monies to thier mates or themselves, we are witnessing the biggest theft of our tax monies, big pharma had a huge chunk of our monies last time, now its the energy firms time to fleece the people, the whole crisis is manufactured by the ruling elites and until people wake up and stand up it will continue, accepting the excuses given and rolling over is NOT something our ancestors would have done.

I see it as- as @BohemianBoho says- that the government knows that they'll lose the next election, so they're gearing up for that by taking all the gold they can find and carrying it out of the country in metaphorical wheelbarrows. When they have no more space in their wheelbarrows they're helping their dodging mates to pile it into sacks. Then they're setting fire to the places they nicked the gold from. This has both the effect of making them and their mates rich (or richer) and leaving the next Labour government in a no-win situation. It's as clear as day.

We should be out on the streets protesting (and many of us are) but still a lot of people don't want to see it.

A simple google glide.co.uk/news/the-current-energy-crisis-explained/

Thanks @loveisagirlnameddaisy but that's a little too basic really. It's more the relationship between prices and profits. It feels like the energy companies (providers) said 'all these factors are happening in the world rn and that's making gas more scarce so we are putting the price up' but then actually, it doesn't cost them any more to make so they get a whole heap of profit and we just suffer the consequences. How do the markets betting on the price of oil affect all of this?

It’s disgusting. It makes me furious. I can’t get my head around why it is allowed to happen. Fucking Tories.

In simple terms. The turkeys voted for Christmas.
Fuck you Tories. Ruining our country.for your own self gain.

There's a Guy Martin program on this weekend looking at power generation, hopefully he might delve into the pricing aspect.

Oil - normally Ukraine would be a supplier not now. Though OPEC has now increased other supply so price has dropped a bit.
Gas - Russia normally a big supplier the only impact they can have on the West is restrict supply so price roses.
Sunflower oil - used in many, many things Ukraine is a huge supplier. Global Shortage so costs rise.

How does all that explain the record breaking profits of the energy companies, though?

@BrutusMcDogface it’s been a very cold winter, December had a long cold snap

also, there is a price kartel really, all energy suppliers are raising prices. there isn’t a cheap alternative

it’s late stage capitalism: the people who own gas, electric and water (water will become more expensive too) can just keep charging higher prices as we aren’t going to cancel heating and water, are we?

I have the feeling things are still going to get a lot worse

Also, as said above, the current government are just in it for themselves and don’t care about prices of food, heating and water going up. They and their mates are laughing all the way to the bank.

How does all that explain the record breaking profits of the energy companies, though?

Due to the war in Ukraine, and the rise in demand post-covid, the wholesale price of oil and gas increased, so companies involved in their extraction (shell, BP etc) have seen their profits increased as the value of the commodity increased.

Companies involved in delivering gas and electricity buy oil/gas on the wholesale market in advance, so the price they paid in 2022 was set earlier in the year when the war started. The wholesale price has now dropped, and that should filter through to consumers during 2023.

If you're referring to BP and Shell, these are not solely utility companies. They are oil companies. The majority of their profits have come from the price of petrol/diesel increasing.

Like a PP said, scarcity increases wholesale price of these things. Which increases what the companies pay for it, which increases what we pay for it. Profits are percentages, so will go up when the price goes up.

Thank you. It’s heartening to know that the prices might actually go down.

I bet prices won't go down though. There are always easy reasons to increase prices but they rarely lower them

The guys making the money are the ones extracting it from the ground.
The folk who supply you and me aren't making money - they are loosing it, big time. Thats why so many went bust.
Those companies who do both bits are using the massive production profits to support the domestic supply part of the company.