Who’s to blame for the gas price rise?

July 31, 2008

gas1.jpgAs 16 million people digest the news that their gas bills are going up 35 percent, courtesy of British Gas, blame for the staggering rise is flying thick and fast.

Centrica, the British Gas parent company, says it is unable to resist the sharp rises on world oil and gas markets and that any attempt to impose windfall taxes would crimp its investment programme.

Energy watchdogs question how the company can be allowed to impose such steep rises at the same time as it makes healthy profits for its shareholders.

Opposition political parties say the government has not built sufficient gas storage facilities and has failed to negotiate an open market across the European energy sector.

What do you think? Are you going to feel the pinch this Winter?

14 comments

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Why don’t the government enforce a windfall tax on the power companies and then give it back to them to use only against oil price thereby the can pass this reduced cost onto the consumer

Well, ultimately it’s Gazprom and the Kremlin, for arbitrarily deciding that gas prices should be linked to oil prices, and that high gas prices should be used as an instrument of foreign policy.Of course, an inefficient EU market for gas, from which we now have to source much of our gas, doesn’t help. What have the Commissioners being doing all this time?I don’t think the argument about gas storage necessarily holds up. All capital investment is to some extent hostage to fortune – without the current spike in prices, then investing in infrastructure for importing LPG instead of for gas storage would indeed have been the right thing to do.

Posted by Ian Kemmish | Report as abusive

Why when profits have fallen by 20%, do they raise bills by 35%…can someone please explain to me how that works. Greed greed greed, thats all it is.

Posted by Steve Bruns | Report as abusive

Its about time that this government had a taste of the medicine that they seem to enjoy putting us all through. Perhaps we should all go for a 35% wage rise and then let Brown & his cronies try and sort that out. I bet Brown or Mervyn King don’t have to tighten their belts. This is where back door taxes have got us……….. ask them what they have done with all the money they have earned from our oil in the North Sea. We are still 400 billion in debt, when they took over 11 years ago from the Tories our balance of payments was virtually nil. Perhaps a start would be for our Army to be pulled out of conflict in Iraq & Afganistan, just think how that would help our economy.

Posted by Des | Report as abusive

Seems like a lot of hot air to me …

Posted by Toby | Report as abusive

Sky high salaries, sky high pension deals, sky high expense accounts, inadequate business model, poor investment, bad planning, increased dividend, misleading spin…….So how is this situation better than Nationalisation?

Posted by Richard Walsh | Report as abusive

Why are costs in europe so much cheaper and why are they not suffering the same increases? Could it be that so many of our utility companies are european owned and they see us as ‘treasure island’? The regulators need to compare costs across europe to be sure we are not being taken for a ride. Surely this is why we joined the EEC?

Posted by peter savage | Report as abusive

Ita about time that the Labour party woke up and represented the people in need, the only way forward is to renationalise all the utilities, as profit for the rich is causing distress for the poor and needy.

Posted by Peter | Report as abusive

I agree that this is all about greed and the shareholders. I work for Lloyds TSB which has just announced a statutory profit reduction of 69% but you don’t see Lloyds running round trying to charge all its customers for using its banking services (though that may eventually come depending the overdraft saga outcome). So come on gas companies. Take the pain. We are.

Posted by Stephen | Report as abusive

This is all succesive governments fault, did they really think UK Oil and Gas reserves would last forever?Not only that, they played a silly game with the USA sucking oil and gas out the ground as quick as possible in order to bankrupt the ex-soviet union, whom now will bankrupt us!During the years of almost free North sea oil, we should have set about an expansion of non fossil fuel electrical expansion, even this labour government should have seen the chalenges 10 years ago and addressed them early, time we had engineers and scientists in the house of commons and not clueless lawyers leaving everything to market forces.

Posted by Smiffy | Report as abusive

It’s about time that directors gave the impression that they know what it is like to live like the rest of us. Excessive salaries and bonuses are clearly leading to a “them and us” mentality that can only damage business in the long run. The present disrespect for customers will only serve to destroy the reputation of business and will lead, eventually, to a loss of confidence in the financial system as a whole.

Posted by Chris Moore | Report as abusive

The therm is mightier than the sword. All those years that we spent beating the rest of the world, now it`s payback time. Thanks a lot Maggie for selling everything bar the kitchen sink ( only because it`s probably leased from someone else ) We will soon be back to the Good Old Days !!!!!!!!!!!

Posted by Stephen H | Report as abusive

Surely high energy prices will not only hit the public but industry and the services too. I strongly believe that all the ‘green’ issues have added to misery and the government just grows rich on the proceeds. Why not give money to people for the installation of solar panels etc.? That would at least show a bit of forward planning rather than the ‘tax the profligate’ ideology they have now.As for who is to blame, I’d say Globalisation.

Posted by Nan | Report as abusive

The recent rise in gas and fuel should make us all realise that we are using up earths limited natural resources at ever increasing rates. As the demand from developing countries continues to grow the dwindling resources will be sold to the highest bidders. The cost of energy derived from fossil fuels will become a lot more expensive and we are getting a taste of things to come. It is imperative that we start to think about sustainable living that does not rely on ever increasing consumption.

Posted by David | Report as abusive