The Roman Emperor Tiberius, discussing the raising of tax revenue from the imperial provinces said "It is the duty of a good shepherd to shear his sheep, not to skin them." Certainly when it comes to the current unscrupulous activities of the energy cartel members, it is pretty clear that we are all being skinned if not properly fleeced.
By now most people should be aware that British Gas owner Centrica has reported operating profits of £1.3bn in the six months to 30 June, down 19% on the same period last year. The Centrica results also include a 54% fall in operating profits at its residential energy division, British Gas, to £270m.
British Gas not surprisingly says that higher wholesale gas prices are responsible for the fall in profits. By coincidence British Gas is prepares to raise gas prices by 18% and electricity prices by 16% in August. The BBC suggests that this increase will push up the average bill for around nine million customers by £190 a year.
British Gas getting its retaliation in early has said that it has been selling gas at a loss since April due to the rising cost of gas on the wholesale markets. They also say that the core business of home gas supply British Gas has lost customers and lost market share when compared with the same period last year.
Customer accounts for gas were down 0.7% from last year and market share down 0.5%, though it picked up customers for electricity supply. Oddly though British Gas did record an increase in total customers in the same period up 159,000 to 16.1 million accounts.
Centrica (British Gas's parent company) is a major gas producer and sells gas on the wholesale market and reports increased profits from operations, which include production in the North Sea and Trinidad, which increased by 14% to £414m. British Gas is one of the 'big six' energy companies (basically an energy cartel) which control 99% of the UK energy market leaving scant opportunities for any new small energy producers - so much for the free market?
Any chance of regulation on unsavoury business practices and cartel like behaviour from the Con Dem Government - I suspect that hell might freeze over first!
What do you think the appropriate level of profit should be? Given the huge costs that the energy companies have to shell out to improve the energy infrastructure?
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