Produce a product people need, charge as much as people will pay, retire and buy a house in Monaco . . . . 😉
Wholesale prices go up 30%, consumer prices go up 18%. Expect rage from the Daily Mail.
[i]Expect rage from the Daily Mail. [/i]
it's printed on their mast head, isn't it?
What tends to bother me is that when wholesale proces drop 30% they seem to only drop retail prices by 10%...
could look it that way, or as an alternative, provide a fundemental need to the market to allow it to function. Provide it at as low a cost as possible to allow more productive activities.
You know like roads, post, er.. water, Telephony, Electricity, Gas....
In a free market economy they should be competing to get customers on price and quality. Unfortunately the free market seems to be failing in many cases.
it's printed on their mast head, isn't it?What tends to bother me is that when wholesale proces drop 30% they seem to only drop retail prices by 10%...
That's to accrue money so when the prices rise the customers get cushioned.
not the market is perfect it does everything perfectly.
it is why in a capitalist society no one suffers , no one goes hungry or is refused medical care.....like i said the market and capitalism is perfect
Not one industry privatisation in my lifetime has benefited the consumer.
A privatised power (or water) industry is morally reprehensible and only justifiable by twisting ideology so far that the truth disappears.
That's to accrue money so when the prices rise the customers get cushioned.
You mean like the way they bumped you direct debit up even when you owe them nothing.
What Rusty Spanner said. Nationalisation of power and water is needed more now than ever.
MSP - MemberIn a free market economy they should be competing to get customers on price and quality. Unfortunately the free market seems to be failing in many cases.
The lie about competition is trotted out every time an industry is stolen from the public and given to business friends of the current administration.
The most amazing thing is that the majority of the public still appear to believe it.
absolutely agree.A privatised power (or water) industry is morally reprehensible
What tends to bother me is that when wholesale proces drop 30% they seem to only drop retail prices by 10%...
It's not a direct buy gas today at COSTCO gas sell to consumer tomorrow through corner shop though. Commodities are bought and sold with various with hedging to try and decrease the volatility of the supply cost. Otherwise either consumers prices would have to change daily to follow the markets or prices to the consumers would have to be on average higher so as to cover the increased volatility and hence risk in the the supply price of the underling commodity, maybe resulting in some sort of payback for overpayment at the end of the year.
Having said that I am sure the opportunity is there for making a little extra as the the complexity makes it easier to hide. However it's not as simple as gas goes down 10% wholesale consumer prices should go down 10%
If you see Sid, tell him he's a ****!
[i]Wholesale prices go up 30%, consumer prices go up 18%[/i]
So does that mean the gas suppliers' profits have gone up or down?
Well we have plenty of choice to move suppliers and quite easy to do on the web but I think it's poor that the suppliers have different deals that get expensive after you've signed up and they introduce a new lower one to get new people to join them. National Power are terrible for this so I try to change every year to their new one. It penalises the less well informed.
Rusty Spanner et al - you are all incredibly naieve and simple.
Nationalised industries may not profiteer but they are incredibly inefficient, there are countless examples all over the world. Overall the consumer has beenfited from privatisation.
Overall the consumer has beenfited from privatisation.
I would like to see you back up that assertion with some facts.
[i]Overall the consumer has beenfited from privatisation.[/i]
Would you include rail transport in that?
Rail is different. That relies on a government subsidy which muddies the water.
Network Rail is a good private model, i.e. not for profit. There needs to be some thought on how the train operating companies (TOC's) can be reformed but the model does actually work reasonablty well. Certainly much better than the Railtrack model.
In a free market economy they should be competing to get customers on price and quality. Unfortunately the free market seems to be failing in many cases.
Firstly, we don't have a free market in anything - everything is regulated to some degree.
A perfect market requires perfect information, but where capitalism falls down is that even when information is made available there simply is not the time for most people to assimilate and analyse it all.
That was the root cause of the banking crash. We've managed to build up system that are so complicated that no one can understand them anymore.
I haven't got a clue how much gas actually costs to produce, and frankly I don't want to know, because it would be a full time job trying to stay on top of it. What I'd really like is the chance to see a simple price comparison between companies - but alas all the energy providers do their damnedest to stop that happening, by offering so many contracts and tariffs that you simply can't decide what is best.
And they call this system of subterfuge....
CONSUMER CHOICE.
It's all bull$hit, designed to part consumers from their money.
The pendulum has already swung way way too far in the direction of private industry. Capitalism as we know it is a zero sum game where the owners get richer and the plebs get poorer.
Power to the people!
Ah.. I feel better now.
Really, if you can't even use a simple comparison website then you don't deserve competitive utility prices.
Stupid people pay more - I have no problem with that!
Stupid people pay more - I have no problem with that!
You mean you think it is OK for anyone to rip anyone else off if they can get away with it?
AS in the onus is on YOU to work out what your needs are and who is the most competitive. We all do this with car insurance ...it really is not that difficult.
Really, if you can't even use a simple comparison website then you don't deserve competitive utility prices.Stupid people pay more - I have no problem with that!
Are your parents \ grandparents \ elderly relatives Internet savvy? Or just stupid ?
...it really is not that difficult.
But it is staggeringly time consuming, monotonous and a waste of life.
Really is that the best you can come up with! The internet is the easiest way to compare prices but certainly not the only one.
The whole point of having competion rather than a monolopoly is that there is choice. The choice forces companies to innovate, find new cheaper and more efficient ways of doing thing (to get a competitive edge). Are you really saying that this is bad?
I'm saying that that isn't what happens.
In order to thwart price comparisons all of the utilities come up with more and more complex tariffs and contracts that make it more and more difficult to choose between them.
It's a pointless arms race and the consumer loses, even as apologists for the system are telling us how great all of the "CHOICE" is.
[url= http://www.bbc.co.uk/iplayer/episode/b00mbm3j/That_Mitchell_and_Webb_Sound_Series_4_Episode_2/ ]Mitchell and Webb put it nicely[/url]
-> 07:54
Rubbish!
The point is you can [u]choose[/u] to shop around ...or you can stay where you are. You still havent come up with a convincing argument why this is bad?
You still havent come up with a convincing argument why this is bad?
I have. You just don't recognise it.
it depends on what you mean
Cheaper often means moving jobs abroad and buying trains from germany and UK folk loosing jobs which then costs money anyway.
It means EDF energy own a lot of our utilities and takes the profit abroad etc.
It is equally naive and simplistic to think that equilibrium/market is some sort of moral goal. Look at food it means people starve. I am not sure why I should big up a market that achieves this.
Countries export food whilst their own populace starves because we pay more for it than they can...is this "competition" good for the starving folk?
Almost all folk accept competition can be a good or a bad thing depending on what you choose to look at. it is not as simple as you suggest.
The main problem is equilibrium and markets have no morals unlike most people. Hence the conflict.
I think the price confusion is a good point as well.
in a perfect world the use of price comparison websites would be easy, but energy tarifs are not actually comparable. Peak/Off Peak, standing charges or not, discounts for dual fuel or Direct debit,
How many people could actually tell me what there power consuption at anytime of day or night is, because to ensure you get the best deal that is what you need to know.
The choice forces companies to innovate, find new cheaper and more efficient ways of doing thing (to get a competitive edge). Are you really saying that this is bad?
In the case of utilities, yes.
Current setup favours the internet savvy and well-off enough to have and afford direct debits. Promotes endless provider-switching which of course is not 'free' -all the admin etc has to come out of the equation somehow. Punishes the computer illiterate, elderly/vulnerable (doorstepping etc) and hand-to-mouth poor ('payg' gas and electricity, ever tried it? It's well expensive!)
The internet is the easiest way to compare prices but certainly not the only one.
[b][i]Really?[/i][/b] I am university educated and quite comfortable with maths that is all letters and no numbers. But I would be bolloxed trying to work out my best energy deal without price comparison websites. (BTW, how are they funded and where does that money come from in the end?)
Junkyard - You are of course correct. The market does not have morals. It merely seeks to maximise profits. The basis is that to make profits they need customers who make the choice based on competitive prices. Its almost like a game between consumer and producer as to who can get the most.
What is needed in any free market econoly is rules. Rules and regulators. I think that in this country the balence is ok. Room for improvement but there are sufficient regulators: Offgen etc. There are also various consumer groups and we have some of the best consumer regulation and consumer law.
Current setup favours the internet savvy and well-off enough to have and afford direct debits. Promotes endless provider-switching which of course is not 'free' -all the admin etc has to come out of the equation somehow. Punishes the computer illiterate, elderly/vulnerable (doorstepping etc) and hand-to-mouth poor ('payg' gas and electricity, ever tried it? It's well expensive!)
Yep, I have been on the PAYG elec and gas. It is expensive. I'm not saying this system is perfect ...its not. It is however far better than a nationalised monopoloy.
What is needed in any free market econoly is rules. Rules and regulators
Have you noticed the oxymoron in that!
What is required is a market that works in the interest of the consumer not the shareholder. Why do you need more than one tarif? simple question, look at your house, when you change energy supplier does a new wire get attached to your house, do they change the meter? No, what happens is you get a piece of paper from someone else they will charge you a figure that may or may not be cheaper than the last supplier, afterall the best tarrifs are only available via direct debit.
It is however far better than a nationalised monopoloy.
No its not.
Earlier:
The whole point of having competion rather than a monolopoly is that there is choice. The choice forces companies to innovate, [b]find new cheaper[/b] and more efficient ways of doing thing (to get a competitive edge). Are you really saying that this is bad?
Just there^^
Yep, I have been on the PAYG elec and gas. It is expensive. I'm not saying this system is perfect ...its not. It is however far better than a nationalised monopoloy.
1) So is it cheaper or not?
2) 'Monopoloy' implies making profits for shareholders. Like Tesco. Or Newscorp. That is not what other posters are suggesting by re-nationalisation. Nationalisation implies not-for-profit, or proceeds reinvested into services or reduced costs to consumers.
I wonder how many people have trotted out the renationalisation argument. So you trust our government with nothing, and you'll quite happily add Utilities to that.
Even in a regulated market we are buying the raw materials for gas and power from out of the EU, so how you think it would help is beyond me.
Here is my responce on this forum to the SP rise last month
Its similar to retail petrol prices, every supplier is exposed to the same 'spot' market price. But some hedge forward longer than others.To the point above about the price not falling there are 2 things, 1 is that sometimes they do and the other is that wholesale prices are generally trending up, and for some period of time energy is effectively sold at a loss until the time is right to make an increase so profits can be made for the rest of the year. So what you see at the retail end is the trend rather than the movement in spot prices.
It is not a cartel, but given the suppliers are broadly exposed to the same commodity cost then they are going to take broadly similar pricing decisions and take the lead from the first in the pack. If say Eon had raised their prices by 12% 4 months ago they would have spend 4 months haemorrhaging customers - doesn't make sense does it.
Another thing to say is that the UK has one of the lowest retail prices in Europe for gas and power, I have a graph somewhere but can’t find it right now.
Next to take into account is that profits on UK production of Gas are taxed at 81%! Don’t forget suppliers have to invest in future generation, supply and infrastructure as well as several costly commitments mandated by government, namely roll out of smart meters and the green agenda.
Lastly despite big headline figures these businesses are single digit margin ones, look at your food shopping, your travel and your housing and ask yourself if the margains earned compared to the investment required in future and the tax burden make these prices ‘unfair?
Why do you need more than one tarif? simple question, look at your house, when you change energy supplier does a new wire get attached to your house, do they change the meter? No, what happens is you get a piece of paper from someone else they will charge you a figure that may or may not be cheaper than the last supplier, afterall the best tarrifs are only available via direct debit.
It doesn't work like that. National Grid transport the gas/electricity to your house (rather like Network Rail).
Different tarrifs allow you to choose an arrangement that suits your needs. You can choose green energy, web saver tarrifs or traditional paper billing and retrospective payments. Why is direct debit cheaper - beacuse its more efficient!!
The whole point of having a more competitive tarif for DD is to incetivise people to purchase energy by the most efficient way. In effect they are passing on this efficienvy to you! Hence it really is no surprise that an internet only deal with direct debit payment is cheaper. Its cheaper because it costs the company less! Please tell me if you believe this to be morally reprehensible.
djglover, give or take the odd loyalty offer, diesel is not more expensive if you pay in cash, buy a few litres at a time, buy your peparami and newspaper or order it online. Yet it is bought wholesale in much the same way as gas according to your post.
The point is not just about cost to consumer vs profitability, but the unequal and unfiar way those cost savings are brought to different types of consumer.
2) 'Monopoloy' implies making profits for shareholders. Like Tesco. Or Newscorp. That is not what other posters are suggesting by re-nationalisation. Nationalisation implies not-for-profit, or proceeds reinvested into services or reduced costs to consumers.
mo·nop·o·ly
? ?[muh-nop-uh-lee] Show IPA
–noun, plural -lies.
1.
exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.
2.
an exclusive privilege to carry on a business, traffic, or service, granted by a government.
3.
the exclusive possession or control of something.
