Energy Bills

[CVByrne]

Also link to the money supply figures

• UK: M2 money supply 2010-2021 | Statista

[blandy]

55 minutes ago, CVByrne said:

We have a set amount of goods and services in the country/world. Call that number 1000

Because of Covid, that's not right. Covid caused all kinds of businesses to close down or reduce output , which reduced the supply of goods and services and that situation has yet to recover. meanwhile people are able to now go out and spend again  - so it's classic supply (reduced) v Demand (recovered/increased) causing inflationary pressures. I accept the logic behind what you wrote, but I'm not at all convinced the furlough aspect is responsible for any UK inflation. I think that's a red herring.

[CVByrne]

16 minutes ago, blandy said:

Because of Covid, that's not right. Covid caused all kinds of businesses to close down or reduce output , which reduced the supply of goods and services and that situation has yet to recover. meanwhile people are able to now go out and spend again  - so it's classic supply (reduced) v Demand (recovered/increased) causing inflationary pressures. I accept the logic behind what you wrote, but I'm not at all convinced the furlough aspect is responsible for any UK inflation. I think that's a red herring.

Yes the amount of stuff should have grown at the standard rate in a year while during covid the normal supply of goods and services slowed. Making supply shortages. This added to the massive printing of money. In America they just sent stimulus money to everyone in the mail to go spend. It's a tsunami of inflationary pressures. Throw in the war in Ukraine it's really unlike anything we've ever experienced. 

[CVByrne]

22 hours ago, tinker said:

I can, tax is a percentage, prices go up  tax revenues go up, especially with energy as 40% of the price we pay is tax or vat. The retailer for fuel makes very little in comparison , the big winner is the government in tax revenues. How much of the the energy cost is made up of workers wages? Very little I would guess but they won't get their share of the prices increase , it will go to the business owners and governments as they will say they can't afford to give the worker the RPI rate, despite raising the final prices by RPI. 

The government could either limit the amount of tax and vat they take from energy or tie the fuel price to the cost of a barrel rather that let market forces (greed) dictate the price.

Reducing tax can have a small impact on Energy prices. The primary factor is the rising cost of the gas / oil in the international market. The government can't do anything to affect those global forces. Then Energy is just one part of inflation it makes up just over 1/4 of the current 7.9% inflation. So having a small impact on a quarter of the current inflation isn't going to have an effect. So I disagree with your statement that they can "play a huge part in bringing inflation down". I think people just want to blame the government for this when they're essentially powerless.

[Genie]

If the energy suppliers are having to pay more in the international markets for gas/oil then why are they also able to record massive record profits?

Are they really paying more their end? 

[Loxstock92]

Just now, Genie said:

If the energy suppliers are having to pay more in the international markets for gas/oil then why are they also able to record massive record profits?

Are they really paying more their end? 

Free market capitalism.

[CVByrne]

4 minutes ago, Genie said:

If the energy suppliers are having to pay more in the international markets for gas/oil then why are they also able to record massive record profits?

Are they really paying more their end? 

Companies who pump the oil and gas out of the ground make more money when the price of that oil is high and less money and losses when the price is low. It's supply and demand. Same for any commodity like food, metals etc. 

These companies aren't controlling the market. They can increase output as best as they can (and they do). But it's lazy to just point at BP or Shell and say you're the ones causing the energy prices to be so high. It isn't them, but yes they're benefitting massively from the price rises of oil and gas. 

[CVByrne]

Many of the Energy suppliers as in the companies we pay for Gas and electricity have been going bust due to the government price caps. It's been a tough time for the industry. The bigger companies are making profits because demand is back after all these lockdowns. They're not making anywhere near as much profit as the oil and gas mining companies. 

[Genie]

6 minutes ago, CVByrne said:

Companies who pump the oil and gas out of the ground make more money when the price of that oil is high and less money and losses when the price is low. It's supply and demand. Same for any commodity like food, metals etc. 

These companies aren't controlling the market. They can increase output as best as they can (and they do). But it's lazy to just point at BP or Shell and say you're the ones causing the energy prices to be so high. It isn't them, but yes they're benefitting massively from the price rises of oil and gas. 

Is someone telling them what they need to charge? If not then they could set their prices lower, still make profit and not cripple the world economy. 

[CVByrne]

5 minutes ago, Genie said:

Is someone telling them what they need to charge? If not then they could set their prices lower, still make profit and not cripple the world economy. 

Oil and gas are commodities. They are driven by supply and demand. Companies buy their oil to burn to create electricity or to turn into petrol etc. With higher demand and reduced supply more people bidding for the oil / gas drives the price up. That's market forces. 

If the oil is just set at a specific price who decides who gets the oil? It's like saying I'll auction this house but I will cap the price at £100k. 5 people will pay that price so who gets the house? 

[foreveryoung]

2 hours ago, CVByrne said:

Oil and gas are commodities. They are driven by supply and demand. Companies buy their oil to burn to create electricity or to turn into petrol etc. With higher demand and reduced supply more people bidding for the oil / gas drives the price up. That's market forces. 

If the oil is just set at a specific price who decides who gets the oil? It's like saying I'll auction this house but I will cap the price at £100k. 5 people will pay that price so who gets the house? 

So we basically need to park the cars up, get log burners and stop using so much energy. This will slow the demand and lowers the pricing.

I really never knew there was a high demand at the moment, aren't we supposed to be using less, going green and all?

[CVByrne]

25 minutes ago, foreveryoung said:

So we basically need to park the cars up, get log burners and stop using so much energy. This will slow the demand and lowers the pricing.

I really never knew there was a high demand at the moment, aren't we supposed to be using less, going green and all?

Well the demand essentially vanished during lockdown and so the supply was ramped down. They then ramped it back up but under estimated the rebound, massive pent up demand. Throw in the sudden war in Ukraine which takes a giant producer off the market means supply has suddenly dropped. 

The prices will drop themselves as the new increase in supply comes in and the Ukraine war hopefully ends. The same forces that have kept oil prices low for years (fracking) is still there. It's just a temporary price shock.

[bannedfromHandV]

Another gas related explosion in the news, feels like there’s been one or two others in the past week or so too, a result of people messing with the gas pipes / meters etc to try and cut costs?

[sidcow]

3 hours ago, foreveryoung said:

So we basically need to park the cars up, get log burners and stop using so much energy. This will slow the demand and lowers the pricing.

I really never knew there was a high demand at the moment, aren't we supposed to be using less, going green and all?

Problem is, what we do here has little demand on global pricing. India and China are massively increasing consumption, they're the ones driving demand. Our consumption it literally a drop in the ocean. 

Best thing we can do to protect ourselves is find something else we can control like wind and solar and heat pumps. Stop buying the oil and gas, just get out of the game ASAP. 

[tinker]

7 hours ago, CVByrne said:

Reducing tax can have a small impact on Energy prices. The primary factor is the rising cost of the gas / oil in the international market. The government can't do anything to affect those global forces. Then Energy is just one part of inflation it makes up just over 1/4 of the current 7.9% inflation. So having a small impact on a quarter of the current inflation isn't going to have an effect. So I disagree with your statement that they can "play a huge part in bringing inflation down". I think people just want to blame the government for this when they're essentially powerless.

Tax on fuel is currently 53p per litre, vat at 20% is added to the total price. Let's say fuel is £2 a litre, total tax including vat is 93p. It's the price the consumer pays that's the killer not the wholesale price. 

[Xann]

Quote

Some critics wonder if this economic model even counts as “capitalist” any longer, seeing as it has abandoned the risky, productivity-enhancing investments that have long been seen as capitalism’s hallmarks. Certainly, the liberal language of “citizens” and “consumers”, “public” and “private” sectors, feels inadequate to describe a cost of living crisis in which we are largely trapped in our payment obligations, living at the behest of businesses that have neither a political nor an economic incentive to serve our interests.

Grauniad

[foreveryoung]

1 hour ago, sidcow said:

Problem is, what we do here has little demand on global pricing. India and China are massively increasing consumption, they're the ones driving demand. Our consumption it literally a drop in the ocean. 

Best thing we can do to protect ourselves is find something else we can control like wind and solar and heat pumps. Stop buying the oil and gas, just get out of the game ASAP. 

We can't protect ourselves period!! Where do you think the taxes are coming from when we all switch to heat pumps and electric cars and stop using fuel.

[tinker]

8 hours ago, foreveryoung said:

We can't protect ourselves period!! Where do you think the taxes are coming from when we all switch to heat pumps and electric cars and stop using fuel.

It's where our taxes are spent we need to concentrate on, I can't see a clear sign on where all the billions raised are being spent. It's certainly not been spent at Heartlands hospital which is a complete mess. 

[CVByrne]

1 hour ago, tinker said:

It's where our taxes are spent we need to concentrate on, I can't see a clear sign on where all the billions raised are being spent. It's certainly not been spent at Heartlands hospital which is a complete mess. 

We spend more than we take in as taxes in UK. We've had budget deficits for years and it was over 8% at £187bln in 2021. We can't keep borrowing forever. We also have the highest tax burden in over half a century. We have to spend lots of tax paying the interest on the national debt and fund services. 

[bickster]

12 hours ago, tinker said:

Tax on fuel is currently 53p per litre, vat at 20% is added to the total price. Let's say fuel is £2 a litre, total tax including vat is 93p. It's the price the consumer pays that's the killer not the wholesale price. 

The VAT element of fuel at £2 per litre is 33.3p Fuel Duty is 58p. Total tax on a £2 litre is 91.3p