Wednesday, 30 July 2008

British Gas Ripping Us Off Again

If ripping off its customers was an Olympic Sport, we would have the Gold medal winners in British Gas owner Centrica who have announced yet another massive fuel price hike.
Blaming “soaring wholesale energy prices” Centrica have announced it is to raise gas prices by 35% with immediate effect.
Centrica made a profit of £2 billion pounds in 2007, and British Gas announced that its profits for the first half of the year were down by 69% to £166m.
Now a cynical person would suggest that the only reason why they've increased prices by 35% is to protect their disgustingly high profits and very little to do with "soaring wholesale energy prices."
We have six utility companies and like the cartel that it is, all of them raise their prices within a few weeks of each other and rake in the profits, leaving the customer no choice whatsoever so where is the Monopolies commission investigation who are supposed to protect us from getting ripped off like this?
Does anyone in this country still believe that privatising utilities such as gas, water and electricity was good for anyone apart from shareholders?
Most will blame this on Mr Brown but it was Margaret Thatcher who privatised all these companies so the fat cats at the top can lavish themselves with massive perks and bonuses.
There are alternatives though. We can take to the streets in a repeat of the Poll Tax riots or the Government can nationalise the utility companies and have state-owned companies providing cheaper gas to customers instead of a private company making profits for its shareholders.
Gordon, this is your chance to swing the electorate behind you, nationalise the utility companies and the rail network. You have nothing to lose and everything to gain and probably about the only opportunity you will have to change the direction you and your party are heading.

UPDATE: In a massive public relations coup, the day after raising customers prices by 35%, Centrica announce half year profits of £1b for 2008.


Anonymous said...

Your an idiot

Go read about where we get gas from and how much they charge!

The far east buy energy at high prices which force us to pay the top end, plus the fact gas is running out!

Please instead of just crying about it, find out the FACTS first

Lucy said...

I am guessing that you know how Centrica works, so there would be no point in me pointing out the way it exports cheap gas from the North Sea to Europe who put it into storage and then link it to crude oil prices and sell it back to Centrica in the winter at a huge profit. Nice business model.

I would like to know why gas and oil prices, which artificially forces up the price of gas, are still linked though. Profit margins possibly?

effay said...

-If they didn't store some gas until Winter, gas prices would be even higher than they are now.

-The (government imposed) price link in Continental countries just means British companies, workers, and, regrettably, the government get more money. I wish we had it that good - it's like taking candy from a baby (or like if the US allowed importation of drugs from Canada, *sigh*).

-Monopolies aren't really a bad thing unless there are barriers to market entry erected by the government, the epitome of which is "nationalization." For instance, one of the accusations that was levied against Standard Oil Company leading up to its division was that their prices were so incredibly low that other producers couldn't make any money.

Cody Bones said...

Lucy, I would love to get into an aggument about nationalization of industries, but I will stick to the issue at hand which is your regulated monopoly of utilities. Do not make the mistake of thinking these are private enterprises. These are government regulated monopolies, which, in my world, come under the heading of Market Socialism. Market Socialism tries to combine the best of both worlds, but has proven time and time again that it only manages to combine the worst traits of both. We have our own Market Socialism in the form of Fannie Mae, and Freddie Mac, which have caused amazing problems here. Either privatize (really, not half way) or don't. The halfway measures manage to incorporate the worst of both worlds. Greed with a safety net is about the worst combination possible.

Cheezy said...

"Your an idiot"

I guess this is irony on a very basic (not to mention grammatical) level... however I still got a good chuckle out of it.

Lucy said...

Made me sigh as well cheezy but i didn't want it to distract from his argument that one of us was an idiot.

Lucy said...

effay - The problem is that they only have enough storage for 2 weeks worth of gas, so instead of building more storage, they sell it abroad and then it back at a higher price. I'm no economist but even i see the flaw in that plan and i'm no planner but even i see a way to avoid having to store it elsewhere.

Cody - I may be wrong but doesn't Market Socialism involve the price flutuating up and down due to events?
When the price of oil falls, so should the price we pay so the story goes. Can you really see that happening?