Gas Prices

[thesultanofsheight]

Wait, gas suppliers (eg. Manx Gas, British Gas, etc) don't decide prices, do they? That's done in the commodities market, right?

 

They can decide when to absorb them or pass them on to consumers though. They can also decide on their hedging strategies, and how they forward buy.

[slinkydevil]

It was also nice to hear that British Gas made a profit of £1 billion over the past 6 months, when asked to explain the profits they said that the Company is ran as two, one company the one that produces the gas is the one that made the profit while the one that sells to the public made a undisclosed loss.

 

That's also true of the Oil companies like BP, Shell. It's the locating, extraction and refining side of the business that makes the money - selling petrol at the pump to us makes them peanuts in comparison, I think it's less than 1p a litre.

[triskelion]

Yeah, that's why they have the over-priced shops.

[jimbms]

Can someone explain why the cost of Natural Gas is increasing when it has feck all to do with oil? I can understand why LPG would increase as it is a derivative of oil. Is this just plain and simple profiteering?

Natural gas often comes from the same wells as oil, the rest comes from fields above pure gas pockets, if you look at the southern sector of the North sea, the gas rigs there are owned by Shell, Amico, Conoco etc, only the 3 rigs in the Ruff field are owned by British gas, hence when oil production prices go up the cost is spread amongst all drilling operations, Hence the increase in gas prices. Hope this assists.

[Lee54]

It was also nice to hear that British Gas made a profit of £1 billion over the past 6 months, when asked to explain the profits they said that the Company is ran as two, one company the one that produces the gas is the one that made the profit while the one that sells to the public made a undisclosed loss.

 

That's also true of the Oil companies like BP, Shell. It's the locating, extraction and refining side of the business that makes the money - selling petrol at the pump to us makes them peanuts in comparison, I think it's less than 1p a litre.

 

Price breakdown here http://news.bbc.co.uk/2/shared/spl/hi/pop_...cing/html/1.stm

[Chinahand]

That doesn't make sense to me. If the price of oil is rising because there's a limited supply released by OPEC onto the market how does that effect the Natural Gas supply/demand? The NG gas fields off Ireland has plenty of reserves and there has been no cap on supply.

 

OPEC have repeatedly said that the price rises aren't a supply issue, in fact demand has done down with the rises. It seems to be more about equities dying and jittery markets than any physical reason, but it's bizzare that nobody actually knows why the prices went so high, and the sames true for gas. At least some of the rise has to be down to market speculation.

 

For some reaon I can't display the links below as images, but I thought they give a very pesuasive counter argument to anyone who claims oil supply is not involved in the current oil price rises. See Carpe Diem (an informative, if right wing, economics blog from the US for details - scroll down they are towards the bottom).

 

For some reason clicking these sets of my antivirus, but they are from a legitimate source.

Oil Supply vrs World GDP

Net Oil Exports, GDP, Oil Price

 

Thought this one was also intersting giving a comparison between Exxon's profits and the taxes it pays - I presume the UK companies are similar - probably more as Corporation tax is higher as is fuel duty etc.