British Gas Profits – Old Habits Die Hard

The latest announcement of profits, up by 23%, of British Gas will come as cold comfort to those that do not hold shares in Centrica, who owns British Gas. The days of Sid and ordinary folk owning their own utilities have gone, and the profits which will pay increased dividends will vanish into the wallets of those completely disconnected from those who generate those profits, the long suffering customer.

We are told that the size of the profits from reselling gas and electricity to the British household, will mean that it will be unlikely that there will be any further increase in gas prices before the end of the year, but you cannot count on this because with British Gas old habits die hard.

Although wholesale gas prices  have fallen by 13% these falls cannot be reflected in the consumer price, because despite all the regulators efforts and politicians’ complaints companies like British Gas will inevitably charge what the market will bear, as will every business that operates a monopoly. When you park your car on a roadside parking space you will pay what your local authority thinks you will bear. When you turn on your central heating your energy company will charge you what it can. In either case you have little in the way of choice and the old habits of taking the car or turning on the heating die hard.

There are alternatives that some but not all can exercise. You can use a bike  and not a car for some journeys. You can use renewable energy such as solar water heating, for some of your energy needs, rather than turning on the gas, but these have their complications and you are already used to the complications of running a heating system and running a car and old habits die hard.

 

2 Responses

  1. It seems to me that the energy companies operate an informal cartel.

    If proven this is contrary to Art 85 of the Treaty of Rome (Art 81 Maastrict)

    Instead we rely on OFGEM which states:
    “Our priority is to protect customers interests, which we do through the promotion of effectively functioning competitive markets. We help markets operate effectively by removing barriers which may prevent this, for example by ensuring there is greater transparency of information to all parties including customers, and, when necessary, we use our powers to monitor and address any anti-competitive behaviour or practices which may affect the market.”

    This is pure waffle.

  2. Those bussinesses are called corporations Robert, look up the corporate charter for a better explanation.

    And the old tricks are being played once again, next people will be shouting, corporations make millions, you have just told us, make them pay more taxes, right, Wrong, say nothing about taxes or one will end up paying the extra dividend that the onbardsman raises those rates to.

    It should spell the peoples gas but someone sold it back to themselves.

    Do we need him to explain again, Go on then.

    We migjt learn not to react to the mention of profits on hearing the sellective news.

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