Energy Bills

[foreveryoung]

Maybe it's because of the losses they are making on fuel now everyone is turning to EVs. I mean soon enough we won't hardly need much petrol or diesel will we.

[Ingram85]

On 21/06/2022 at 09:25, tinker said:

Well Range Rovers are flying out the door at JLR, can't build enough of em and they are £100,000 motors. It's not affecting everyone that much!

The real squeeze is at the lower end of the pay scale, it will reduce their quality of life, the only answer is to work more hours , get second jobs. It will increase our productivity no end.....

This post sums up the UK in 2022, the rich get richer and order new cars the poor get poorer and need a second job just to survive. If you’ve got a RR on order then I don’t think you’re worrying too much about the cost of living. 

[ender4]

https://www.bbc.co.uk/news/business-61908998

Is this going to further increase the price of gas?

Quote

Germany takes step closer to gas rationing

Germany has taken a step closer to gas rationing after a drop in supplies from Russia.

The country has triggered the "alarm" stage of an emergency gas plan to deal with shortages, Germany's economy ministry said.

It is the latest part of a standoff between the European Union and Russia over its invasion of Ukraine.

German economy minister Robert Habeck said Russia was using gas "as a weapon" in response to EU sanctions.

"We must not fool ourselves. The cut in gas supplies is an economic attack on us by [Russian President Vladimir] Putin," Mr Habeck said, adding Germans would have to reduce consumption.

"It is obviously Putin's strategy to create insecurity, drive up prices and divide us as a society," he added. "This is what we are fighting against."

Mr Habeck said there would "hopefully never" be a need to ration gas for German industry, but he added: "Of course, I can't rule it out."

Emergency plan

Germany has now moved to the second stage of its three-part emergency plan, which is triggered when there is disruption or very high demand for gas.

The German government will provide €15bn (£13bn) of loans in an attempt to fill gas storage facilities.

It will also start to auction gas to industry to encourage big businesses to use less.

Moving to stage two of the plan puts more pressure on suppliers and network operators to balance out disruption by taking measures such as finding alternative sources for gas.

However, the country stopped short of letting utilities pass on soaring costs to customers, although that is theoretically possible under stage two.

Gas firms already had to ensure supplies under the first stage of the emergency plan, while gas network operators were reporting to the Economy Ministry at least once a day, and electricity grid operators had to ensure grid stability.

 

[StefanAVFC]

Not sure how it looks in the UK, but got the reporting up and running with our heat pump. No gas, only electric in the house (and a wood burner)

Only heating water we're averaging about 30p a day of electric usage. Will be interesting when winter rolls around.

[ender4]

1 minute ago, StefanAVFC said:

Not sure how it looks in the UK, but got the reporting up and running with our heat pump. No gas, only electric in the house (and a wood burner)

Only heating water we're averaging about 30p a day of electric usage. Will be interesting when winter rolls around.

Did you use mains gas supply before you installed the heat pump?

Using gas for hot water and cooking is costing me around 50p a day at the moment (still locked into cheaper 2021 prices).

[StefanAVFC]

29 minutes ago, ender4 said:

Did you use mains gas supply before you installed the heat pump?

Using gas for hot water and cooking is costing me around 50p a day at the moment (still locked into cheaper 2021 prices).

We had the installation but we never used it because the (awful, monopolic) gas company said they wouldn't hook us up until late 2023.

[tinker]

1 hour ago, foreveryoung said:

Maybe it's because of the losses they are making on fuel now everyone is turning to EVs. I mean soon enough we won't hardly need much petrol or diesel will we.

Should legalise electric scooters, ones that meet with an approved standard. 

This fuel shortage could be speeding up the end for personal transport as we know it now, everyone owning cars.

[sidcow]

4 hours ago, CVByrne said:

We are, that is the way to stop inflation is to cause a recession as it reduces demand which then reduces prices which stops inflation. The centrals banks only way to stop inflation is to cause a recession and that's why they're hiking interest rates so fast.

I'm not convinced of this. And I'm far from convinced that traditional methods like increasing interest rates are going to shackle inflation. 

Inflation is NOT rampant right now because of excess consumer spending. It's a unique situation with (the majority) of price rises entirely driven by increased oil and gas prices.  These prices are not going to suddenly drop because the interest rate is up. And whilst a recession will dampen demand to a certain extent, people are still going to need to fill up their car, use electricity and gas so I don't think it will make enough of a dent to lower global prices. 

As I say this is a completely different situation to previous periods of high inflation.  

[sidcow]

14 minutes ago, tinker said:

Should legalise electric scooters, ones that meet with an approved standard. 

This fuel shortage could be speeding up the end for personal transport as we know it now, everyone owning cars.

Yeah, we should all switch to trains........ Oh. 

[CVByrne]

Just now, sidcow said:

I'm not convinced of this. And I'm far from convinced that traditional methods like increasing interest rates are going to shackle inflation. 

Inflation is NOT rampant right now because of excess consumer spending. It's a unique situation with (the majority) of price rises entirely driven by increased oil and gas prices.  These prices are not going to suddenly drop because the interest rate is up. And whilst a recession will dampen demand to a certain extent, people are still going to need to fill up their car, use electricity and gas so I don't think it will make enough of a dent to lower global prices. 

As I say this is a completely different situation to previous periods of high inflation.  

Half of our current 9.1% CPI is due to food and energy. We have 4.5% inflation that is nothing to do with food and energy and we have an inflation target of 2%. So restaurants, clothes, cars, hotels etc. are in massive inflation too. By raising interest rates you reduce the money supply and take more money out of the economy (this will cause a recession in UK) that will cut demand for those items as people reign in spending. That will stop the non energy / food inflation in its tracks. 

No offence, but what matters is what central banks are doing and why. Raising interest rates is the proven way to control inflation. Energy prices and food prices won't be as affected by these interest rate hikes. Energy is linked to demand, and some of that demand is linked to consumer demand. If we are building less we need less energy to do so. So a recession in USA and Europe will drop oil prices. The biggest factor though is of course the war in Ukraine on energy and food prices.

[ender4]

17 minutes ago, sidcow said:

I'm not convinced of this. And I'm far from convinced that traditional methods like increasing interest rates are going to shackle inflation. 

Inflation is NOT rampant right now because of excess consumer spending. It's a unique situation with (the majority) of price rises entirely driven by increased oil and gas prices.  These prices are not going to suddenly drop because the interest rate is up. And whilst a recession will dampen demand to a certain extent, people are still going to need to fill up their car, use electricity and gas so I don't think it will make enough of a dent to lower global prices. 

As I say this is a completely different situation to previous periods of high inflation.  

I kind of agree.

Though if people have less disposable income due to interest rate increases, then people will buy less of all sorts of goods from high-end to groceries. People will cut back on any discretionary spending they have.   

So less goods are transported nationally/internationally using oil & gas. So it should slightly reduce demand for oil and gas across the western world. 

Whether that's enough to bring prices back down is debatable though.

Edited June 23, 2022 by ender4

[blandy]

2 minutes ago, CVByrne said:

restaurants, clothes, cars, hotels etc. are in massive inflation too

Well yes, but only sort of. Demand is back to normal following Covid, but there’s a worker shortage and goods shortage due to Brexit and other unique circumstances

[lapal_fan]

So with inflation, if it were to reduce to normal levels, do wages generally catch up, or does the price come down? 

[sidcow]

9 minutes ago, ender4 said:

I kind of agree.

Though if people have less disposable income due to interest rate increases, then people will buy less of all sorts of goods from high-end to groceries. People will cut back on any discretionary spending they have.   

So less goods are transported nationally/internationally using oil & gas. So it should slightly reduce demand for oil and gas across the western world. 

Whether that's enough to bring prices back down is debatable though.

Yeah, I get that, but I don't think it will be a big enough chunk of demand to materially affect the prices.  it will have SOME effect but ultimately until Putin starts charging less or we find a new supplier with plenty to sell nothigs going to really reduce the prices.

People will still want to heat their homes, drive cars, switch lights on.  Food will still need transporting.  

Before the Ukraine war there were all sorts of explanations about why prices were increasing, it's clear to me it was basically Putin just putting the price up.

[CVByrne]

17 minutes ago, lapal_fan said:

So with inflation, if it were to reduce to normal levels, do wages generally catch up, or does the price come down? 

Deflation is unlikely as that's considered more worrying than inflation. In general the 12 years from 2008 to 2020 has been characterised by real wages falling (so wage growth being lower than inflation). 

What inflation measures is the rate of change of prices over a 12 month period. So if hit 11% inflation in Dec. Then in Dec 23 we hit 4% inflation. That means the prices we pay in Dec 2023 are 4% higher than Dec 2022 which were 11% higher than Dec 2021. 

Price rises are essentially permanent. Food and Energy aside which are the most volatile.

[CVByrne]

27 minutes ago, ender4 said:

I kind of agree.

Though if people have less disposable income due to interest rate increases, then people will buy less of all sorts of goods from high-end to groceries. People will cut back on any discretionary spending they have.   

So less goods are transported nationally/internationally using oil & gas. So it should slightly reduce demand for oil and gas across the western world. 

Whether that's enough to bring prices back down is debatable though.

Also there are the "untested" parts of the new economy will be very interesting. Take Uber and Netflix. In a recession people will take less Uber rides and more busses. They'll cancel subscriptions to Nextlix and other things like Audible, music streaming services, online newspapers and magazines. Lots of people could / will lose their jobs in the tech sector which is built on never ending growth. 

On top of the regular items like less new clothes and holidays means less imports and flights. 

[Xela]

3 hours ago, tinker said:

Should legalise electric scooters, ones that meet with an approved standard. 

This fuel shortage could be speeding up the end for personal transport as we know it now, everyone owning cars.

You will own nothing and you will be happy. 

[Xela]

3 hours ago, sidcow said:

Yeah, we should all switch to trains........ Oh. 

Or the buses. They last run through my parents village in 1988. 

[tinker]

1 hour ago, Xela said:

You will own nothing and you will be happy. 

Lockdown changed the game for so many people. We lost the majority of our workforce over the age of 58, early retirement. It's left a huge void of skills and its starting to hurt us all.

A plumber I know earns £500 a day, he's only been in the game a year. A lack of labour is going to further fuel inflation.  

 

 

 

 

 

 

 

 

 

[ender4]

4 hours ago, Xela said:

You will own nothing and you will be happy. 

Maybe we (in the western world) should all own less.