October 2012 the average EU gas import price was $11.58/MMBTU in October 2013 average EU gas import price $11.61/MMBTU. That doesn't look like SSE 4% wholesale price increase to justify an 8.5% rise to me!
You might be interested in this website which shows the average EU gas import price for the last 2 years.
http://ycharts.com/indicators/europe_natural_gas_priceLast winter and spring, being colder than average means import prices peaked at $12.88/MMBTU hence the reluctance of suppliers to buy at this price, which is why the UK came within 6 hours of running out of gas!
Having to pay higher winter prices for gas due to the UK's very limited storage capacity must have hit their profits, so lets take a look:
Profits 2011-2012: £1.3bn up 2% on 2010-2011
Profits 2012-2013: £1.41bn up 5.6% on 2011-2012
5.6% is well ahead of inflation, so it looks to me like a quasi-monopoly energy supplier continuing to push up prices at the customers expense.
It is interesting how much under the radar Government energy stealth taxes are going up with a rise of 13% in 12 months. Green taxes and other subsidies now account for about 10% of your bill. Don't forget that instead of the Government paying those that receive benefits, their utility bills are capped at a small monthly fee with the energy companies have to cover the rest of the cost, which is then passed on to normal consumers.
The two reasons above and their vertical integration into power generation and gas / oil extraction means their threats of pulling investment in new power stations and gas and oil fields each time the Government threatens to intervene has made the energy companies and their pricing untouchable by the Government, meaning they have basically got us and the Government by the balls.
Notice how much cheaper gas is during the summer when countries that have extensive gas storage facilities stock up to cover the winter peak prices. We only have 2 weeks storage which makes the UK very vulnerable to supply problems and means the energy companies have to hedge winter prices using futures contracts, which will generally mean banks and other financial institutions making an extra profit at a customer's expense and they will be paying more expensive winter prices as well, just trying to flatten any excessive price peaks with these contracts.
OFFers of a weak constitution, they might want to be seated before they open the next link which shows US gas prices from various suppliers!
http://www.quandl.com/markets/global-commodity-markets/natural-gasYes, $2.32 to $3.69/MMBTU compared to Europe's $11.62/MMBTU. Supplies to Asia are even higher than Europe and are up to a peak of $15/MMBTU.
All the time the EU and UK Governments have an abundance of tree huggers amongst them they are going to continue to pursue high scarce energy policies.
The net result will be more people dying during the winter, where they are unable to heat their homes, so expect an increase in the 20,000+ more people that die during the winter compared to the summer and the offshoring of UK based industries and jobs to take advantage of cheaper energy prices.
I am highly confident that the US economy will recover and start to boom with a combination of cheap energy and their 'can do' attitude, for the UK all I can see is the balance of payments deficit continuing to rise above the current record of over 5% of GDP where we don't pay our way in the world and the continuing decline in living standards. Dropping living standards over the last 6 years have been very painful too many and continuance of this can only increase the pain and poverty.
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Topic: SSE is raising prices because of...... (Read 3507 times)