Energy Prices – To fix or not to fix, that is the question

Source ? The cost of everything* related to getting oil out the ground has doubled if not trebled…… Even the cost of the gas needed to get the gas out the ground….

It doesn’t seem to be a problem for Shell.

There is lots of talk about removing vat on gas and electric, but nobody talks about EV tariffs.

From what I can see, this is a tariff that must be subsidised by something, encourages consumption of energy and doesn’t pay tax where it should (road).

Increase this and reduce the other rates.

I’ll be in the car park waiting for the firing squad 😬

Source ? The cost of everything* related to getting oil out the ground has doubled if not trebled…… Even the cost of the gas needed to get the gas out the ground….

Source? Looking at my pay packet. It doesn’t track the price of oil, unfortunately. It’s true that some costs increase – the vicious circle of requiring fuel, as you say, and also the way that contractors bump up their prices in high oil price times so as to keep their greedy snouts in the trough.

It doesn’t seem to be a problem for Shell.

Well, exactly. It’s not feasible to have a global price cap, so the next best thing is to tax excess profits.

It doesn’t seem to be a problem for Shell.

How very daily mail.

If only shells profits were directly related to and specifically to their ukcs operations

also the way that contractors bump up their prices in high oil price times so as to keep their greedy snouts in the trough.

I don’t think you can complain about your own pay not tracking oil/gas and yet say that someone whose pay does track it is “greedy”.

I don’t think you can complain about your own pay not tracking oil/gas and yet say that someone whose pay does track it is “greedy”.

I wasn’t complaining, just observing 🙂

How very daily mail.

If only shells profits were directly related to and specifically to their ukcs operations

It’s “Daily Mail” to point out that a leading supplier of oil and gas is making record profits? Try taking more water with it.

Perhaps you could point out the areas of record growth not related to record commodity prices.

It’s “Daily Mail” to point out that a leading supplier of oil and gas is making record profits? Try taking more water with it.

Try reading what I wrote again….but slower.

Your point stands valid if the profits were driven solely by the commodity values that were being extracted from our own resources.

The cost of extracting a scf of gas here is vastly higher than in other regions and there isn’t enough being extracted here either.

Your point stands valid if the profits were driven solely by the commodity values that were being extracted from our own resources.

Shell profits are not due solely to UK production, but a large part of them are. The UK is a very profitable place for oil companies, despite our limited reserves. One reason for that is the low taxes they pay (don’t pay). Countries like Norway have higher tax rates to fund their society; countries like Nigeria have high tax rates to fund Swiss bank accounts (allegedly).

Countries like Norway have higher tax rates to fund their society; countries like Nigeria have high tax rates to fund Swiss bank accounts (allegedly).

And yet the tables published in documents from the likes of rystad and McKinsey analysing just this take into account the taxes. Place the UK at almost double that of Norway in cost per barrel of oil about 1/3rd more than that of Nigeria. And about 10 times that of Saudi….

Interestingly oil produced in on the UKCS was at its cheapest during the peak of covid….. But there was minimal development ongoing – skeleton staff offshore, minimal travel and mass layoffs. + all non essential maintenance was kicked down the road etc.

I’m pro windfall tax , I’m pro upping the taxes on the companies but the journos spitting out the record profits are a direct result of price gouging is just clickbait- especially once you dial down into the details of where the profits have emerged.

Without links to the reports you refer to it’s hard to respond properly, but take a look at:
https://www.rystadenergy.com/newsevents/news/press-releases/the-uk-offers-operators-best-profit-conditions-to-develop-big-offshore-fields-kuwait-canada-follow/

I dont think they’re “gouging” – at least not any more than usual – but they are clearly benefiting from unprecedented spike in oil and gas prices, while the rest of us are suffering from huge utility bills. That ain’t right.

We’ve just been offered a fix rate deal from British Gas (we’re still on a standard tariff and probably need to shift to the Direct Debit tariff).

On the face of it I’d steer clear but if prices run wild we’d be scuppered. No idea what to do.

They seem quite keen for you to fix….

People are going to freeze to death this winter. In Britain. In 2022.

It’s fine, Rishi has promised to cut inheritance tax.

On the face of it I’d steer clear but if prices run wild we’d be scuppered. No idea what to do.

So that’s approx. £170/month on DD at the new fixed rate?

I’d fix! And it looks like you’re only fixing till Oct 23 so no long tie-in if prices do drop.

Your yearly energy use is very low though based on your previous usage.

For the first time in probably the history of central heating, it is currently cheaper to use LPG than town gas to heat your home. And that’s before October. Not that LPG has suddenly gone down – it’s stil what was previously considered eye wateringly expensive. It’s just not as mental as everything else and prices don’t seem to be raging – we just fixed for 2 years at the same price we were paying a year ago.

Dr J – I don’t altogether agree with that analysis. The UK comes up cheap re. government take because everything else in the North Sea is expensive, and rates of return small, so if there was a large government tax applied nothing would be economic in normal conditions, and nothing would get developed.
Personally I’d like a lower and more stable price, as no doubt another price crash will come along in due course

the-muffin-man

So that’s approx. £170/month on DD at the new fixed rate?

I’d fix! And it looks like you’re only fixing till Oct 23 so no long tie-in if prices do drop.

So approx 65% increase to fix, and Martin Lewis predicting ~70% increase in the autumn and potentially another in spring.
Probably worth fixing just for the stability i guess but it’s a tough call.

On moneysavingexpert’s advice I chose the fixed offered by british gas at end of June as whilst a big hike it was less than the predicted % increase from Oct and next feb’s rises. registered via their automated phone line

Checked new tariff started 1st August as it should have and it hasn’t, we;re on variable. Bastards, as there’s been an increase in the predicted Oct rise in the news since then.

So I’ve raised a complaint ticket which will take 7 days, but I might be snookered as there’s no proof other than a chase call I made to them end of July where they said it would be applied to the account 1st August…no email or text confirmation :-<

My non expert instinct is the the companies will take their money however they can and the fixes aren’t just a random number – just like mortgage rates – using the best analysis they can to ensure their costs and profit are protected.

We are with Bulb so not change to fix without changing suppliers, but we might get it cheaper if it does vary downward a bit during other peoples fixes. That is, unless Octopus take over and move to the more standard model.

I always dither around stuff like this. We could save a little by simply moving to variable rate and Direct Debit (I pay by card quarterly) but I like to keep as much control of our limited resources as possible and tend not to use DD unless I have to.

It looks like there’s a potential price cap increase in October so I assume that they’re only offering fixed rate deals until October so that they can apply any increase (which I believe is expected to be large) before offering another fixed rate deal.

Just checked my OVO account offering – 2yr fixed going from my current variable of 26p a unit to 55p a unit – so a 112% increase. That would obviously be paid from today too so a couple of months at that higher rate to be taken into account.

No too keen on that.

An aside – being vaguely numerate, I find these headlines of monthly figures for an average house so annoying. Like talking about the price to fill up a tank of fuel on ‘an average car’. Talk to me as a grown up in unit per KW and standing charges and let me calculate what I need for myself.

Talk to me a grown up in unit per KW and standing charges and let me calculate what I need for myself.

Most people can’t though. They just know what they pay per month.

And I’ll be honest when I’ve used comparison sites in the past they make it very hard to drill down into the details to make proper comparisons. And I class myself as fairly savvy in these things.

Talk to me a grown up in unit per KW and standing charges and let me calculate what I need for myself.

Completely agree with this – I’ve got spreadsheets and graphs coming out of my ears with our historical usage and per unit costs, but it’s all useless for predicting our costs this winter if they just quote one pretty meaningless number all the time.

I’ve trawled the internet all over the place, there are loads of pages explaining what the price cap is expected to be but absolutely none of them give anything but the pretty useless headline number.

Talk to me a grown up in unit per KW and standing charges and let me calculate what I need for myself.

Absolutely …. Talking about a price cap of £x can’t help but confuse some folks who will inevitably use more than average and wonder their bill is above the cap no matter how many times it is talked about as ” average usage ” — what ever that is,

I am lucky in that living alone in a small flat and out at work all day I never use much my bills for the last year are around £700 and I have space to soak up a large rise in that
but it took me ages to work out what was best for my elderly parents ( 90 ish ) and in the end looking at the bill and the fixed offer it was obvious that even in the worst case scenario of a tripling of bills they would be better off on variable rates and that was only possible because we could work out by knowing unit cost and usage over the last year…

I always dither around stuff like this

As I said, the Energy provider will get their money from you one way or another, fixed or not. The don’t fix for your benefit, thats a disguise to keep your money flowing to them in as predictable manner as possible. They have clever people working out what to charge you to minimise any losses on their part.

Does anyone know a method of calculating if their gas usage is accurate?

We live in a first floor flat, have no heating on from Feb til Oct/Nov (and only then for a couple of hours a day).

So gas is used for showers (about 10 mins a day), hot tap (3 sink fulls a day?) and cooker hob (1 ring for about 20 mins per day max). Everything else is electric.

At the moment we are being quoted as using 1000kWh for each of the last few months (with no heating) so about £80pm on our current plan (Transferred to British gas because People’s Energy went bust)

Is this about right? Or am I paranoid in thinking this is too high, as we really don’t seem to use much gas?

Is this about right?

Family of four, end of June to end of July was £15.72 gas being used for showers/baths/hot water only as of course the heating hasn’t come on via Bulb/Smart Meter

At the moment we are being quoted as using 1000kWh for each of the last few months (with no heating) so about £80pm on our current plan (Transferred to British gas because People’s Energy went bust)

Is this about right? Or am I paranoid in thinking this is too high, as we really don’t seem to use much gas?

As I understand it 1 unit of mains gas is 1kwh at source (i.e. it won’t generate 1kw of heat as your system will have a less than 100% efficiency). So have you been using 100 units of gas at your meter? For reference 100 units of town gas is costing you £8 odd a month currently.

Energy Cost Comparison

Thanks Kryton.. that’s a huge difference! Any idea on kWh or gas units used for a typical month (or anyone else with this info?).

Our Worcester Bosch boiler is 3 years old and just been serviced, all working fine apparently (and seems to be on ECO mode), so can’t see it being that.

Family of four, end of June to end of July was £15.72 gas being used for showers/baths/hot water

£15.72 for a day/week/month?

If per month is everyone on a 1 minute time-limit for a shower! 🙂

Average use (I know) of gas for an average home across the year is about 30kWh a day IIRC, so 1000kWh in summer in a flat seems a little* high.

*OK a lot

joeydeacon

So gas is used for showers (about 10 mins a day), hot tap (3 sink fulls a day?) and cooker hob (1 ring for about 20 mins per day max). Everything else is electric.

At the moment we are being quoted as using 1000kWh for each of the last few months (with no heating) so about £80pm on our current plan (Transferred to British gas because People’s Energy went bust)

That is high, for reference we have two adults and a 7 year old. So that’s at least one shower a day each for the adults plus a wash or bath if we can convince the filthy beast to have one. Heating is off. Our gas usage was 292KW between June and July, 287 May to June and 257 April to May.

£15.72 for a day/week/month?

Month.

British Gas have an app that shows your usage. I think the smart meter updates your use. This is what I use.

Failing that, take some readings.

1000kwh seems excessive, we only used 120kwh of electric in June.

Thanks convert – my bill says as follows:

1 Jul 2022 – 28 Jul 2022 (so not quite a month)

916.22kWh at 7.120p per kWh – £65.23

2896 – estimated meter reading at tariff change (this is in line with the meter reading I supplied)
2925 – you gave us your meter reading
29 gas units at 39.3 calorific value
Standing charge
28 days at 25.923p per day – £7.25

So £72 ish plus gas VAT at 5% for 28 days gas

Gas Meter Readings are:
28/07/2022 2925 1142 kWh
22/06/2022 2888 1737 kWh
04/05/2022 2833 1327 kWh
30/03/2022 2791 1912 kWh
15/02/2022 2730 1223 kWh
27/01/2022 2691 3355 kWh
02/12/2021 2584 63 kWh
01/12/2021 2582 (estimated) 1796 kWh

Is this about right? Or am I paranoid in thinking this is too high, as we really don’t seem to use much gas?

That does sound like a lot, although you can get through 1kwh of gas an awful lot quicker than 1kwh of electricity so it can be difficult to tell.

During the non-heating months our household tends to use an average of about 5kwh a day; this is from a few showers a week (total), two baths and odds and ends of sink and washbasin filling. This only comes to just over 150kwh a month; our total for the year is about 10-13000kwh, the vast majority of which is for heating in winter.

Have you got meter readings to be able to check it properly?

@joeydeacon check your not supplying all the flats with gas/hot water.

My energy company seems really keen for a fixed rate.
So I won’t, based on the basic rules of capitalism.

28/07/2022 2925 1142 kWh
22/06/2022 2888 1737 kWh

Those columns as you paste them don’t seem to make a lot of sense. You appear from column 2 to have used 37 units of gas in just over a months. Not very much at all. The 3rd kwh column appear to make little sense – maybe something is lost in formatting as you pasted it.