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Monday 20 September 2021

Gas Price Hike - Another Brexit Bonus

In yet another exhibition of unintended consequences, the UK - but maybe not Northern Ireland - is facing hikes in the price of gas, with smaller energy suppliers either seeking bail-outs, or even going to the wall. And once more, the exposure of the UK to the full force of the free market shows every sign of being not unconnected to Brexit.

The promise ...

Not that the BBC is yet prepared to mention that particular B-Word, as it tellsThe government is considering offering emergency state-backed loans to energy companies as firms battle to stay afloat amid surging gas prices. Business Secretary Kwasi Kwarteng will hold crisis talks with industry bosses including Centrica and E.On on Monday”.

There was more. “High demand for gas and reduced supply are behind a surge in wholesale prices”. There is, though, reassuring news: “Consumers are protected from sudden hikes through the government's energy price cap, a maximum price they can be charged on a default tariff”. After that, however, is a but. “But that also means energy firms are unable to pass on higher wholesale costs to their customers”.

... versus the reality

And so “Four small energy companies have ceased trading in recent weeks, including Edinburgh-based People's Energy, which supplied gas and electricity to about 350,000 homes and 1,000 businesses, and Dorset-based Utility Point which had 220,000 customers”. In addition, “The UK's sixth largest energy company, Bulb, is seeking a bailout, while four smaller firms are expected to go bust this week, as a result”.

So how big is that surge? “Industry group Oil & Gas UK said wholesale prices for gas had increased by 250% since January - with a 70% rise since August”. What might have been driving such an increase? This from the EU gives a hint: “On 1 January 2021, the UK left the EU's internal energy market. Energy trading through electricity interconnectors between the EU and Great Britain is no longer managed through existing single market tools, such as EU market coupling, as these are reserved for EU countries”.

In case anyone thinks the two are not connected, consider what energy prices look like for EU member states, and those countries that are part of the Energy Community (Norway has observer status). Ian Fraser has had a look: “Once again, Britain has the most energy in Europe, at €207.15 / MWhr (day ahead price). That’s more than twice what electricity costs in Norway (€95.8 / MWhr) #energycrisis Source: LCP Energy”.

Moreover, the day-ahead spread for EU member states has a maximum upper bound of €209.40 per MWh. That for the UK has an eye-watering upper bound of €1083.78, or more than five times as much. Contrast that with the Murdoch Sun telling readers before the 2016 referendum “Boris promises cheaper household gas bills if Brits back Brexit”.

Once again, alleged Prime Minister Alexander Boris de Pfeffel Johnson, who lies more or less as he draws breath, and his pals in our free and fearless press, can be seen to have lied to get the referendum result they wanted. None of them will be among those having to choose between more expensive food and far more expensive energy this winter.

The only unknown now is how long the electorate will tolerate the attempts to claim that the dastardly EU is behind all the misery before they realise they’ve been had. Brexit was a con job and is, as predicted, proving a disaster for the UK. No surprise there, then.

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Anonymous said...

Norway has abundant hydroelectricity.

Anonymous said...

I've argued this before, but Brexit has been designed for two things:

1. Take back control from ordinary people - the EU gave them to much power through the European Court of Human Rights, the ability to travel and meet ordinary Europeans and discover that in many ways Europe does do things better (why do you think the UK withdrew Eurasmus project and even the interrail ticket scheme? Because you'd meet ordinary Europeans and become infested by their ideas in a way that would never happen if you spent all your time in British boozers in Benidorm). The Nasty Party takes over the UK and turns it into the Nasty Country

2. Its been designed to crash the UK economy. Why? To enable the enforcement of more austerity and cutbacks - Tories claim they love a booming economy, well only for their big business mates, small businesses can do one and more austerity keeps the paupers in their place

Arnold said...

"Contrast that with the Murdoch Sun telling readers before the 2016 referendum “Boris promises cheaper household gas bills if Brits back Brexit”."

To be fair to the Sun, it didn't believe Bozo and tried to warn its readers with the prefix'- "EU'LL NEVER BELIEVE IT". Unfortunately, it underestimated their gullibility and many did.

Anonymous said...

There will be a section of the electorate that would rather freeze and starve than admit they were wrong, Tim.

Jonathan said...

Other intended benefits (not for ordinary Brits) is to turn the UK into a tax haven much like it's Crown dependencies. A model nicknamed Singapore on Thames intended to attract foreign banks, hedge funds & other associated shady financial services businesses to London, to turn the UK into a paradise for banksters & other unscrupulous charlatans paid for by you and me via higher taxes and poorer wages & benefits.

If you ever visited the Isle of Man or the Channel Islands then you realise the cost of living there is very expensive for local people but awash with dirty cash and extremely wealthy individuals who pay so little in tax, Thier cleaners contribute more in a month than they do in an entire lifetime.

Anonymous said...

Elect a selfish clown and get a greedy circus

Anonymous said...

"Singapore on Thames"?

More like Thieves On Thames. The most corrupt city in the West. Appropriately with the ugliest skyline.

Anonymous said...

I remember reading years ago that Britain was in a vulnerable position for Brexit due to a lack of food and gas storage. The Tories have had half a decade to build extra capacity - which would have been useful with or without Brexit - but couldn't be bothered.

I fear anon at 1:10 is right and this is an attempt to crash the economy to remove whatever legal and public service provisions still exist. Add into that the anti-NHS drivel being spewed out by the right-wing media and its clear they're hoping the NHS will collapse as well (and anti-schoolteacher attacks for good measure).

Old and reliable method. Do you remember how in the 80s every nationalised industry mysteriously lost a ton of money then the moment it was privatised made record profits? It took years for Steve Jobs to turn around Apple's finances but apparently in the 80s public sector managers could do it within a few months of being a part of the private sector.

AndyC said...

So many benefits from Brexit. Will we NEVER stop winning?

Anonymous said...

Ah, here we go - article on food storage from 2018...


Here's a 2017 story that hopes driverless trucks may alleviate the driver labour supply issue...


Nicko said...

Up next in Brexit Bonus news...

The gas price explosion has triggered a grave shortage of CO2, which is used extensively in the food industry. (see Beeb and The Grocer, amongst others)

Our fabulous government is playing subsidy poker with an American-owned CO2 producer to avert an impending supply-chain crisis. Show them the money, Tory Boys, the paups are good for a few more tax hikes!

Nigel Stapley said...

And guess what? The Big Six (or is it only Five now? Or Four? 'Competition' is a wonderful thing, inni'?) energy supply companies will be given every assistance (with our money), while the smaller, newer suppliers will be left to go bust. This will sharply reduce that fabled 'consumer choice' we've been told about ad nauseam for the whole of the privitisation era as the customers of the companies who have been left to twist in the wind are handed over by the state to one of the big cartel operators.

It happened to me last year, when my suppplier failed and I was handed over to Brutish Gits, a company I moved away from years ago because they were so expensive and inadequate. Moving to another company now would be pointless (that 'choice' again) because the same thing will keep happening.

Remember that Ofgem isn't there to protect the 'consumer'; it's there to protect the cartel players from both each other and the possibility of being challenged by the smaller and cheaper suppliers.

And guess who of those two groups is most likely to give big donations to a Certain Political Party?

As ever, follow the money.

Mr Larrington said...

Crikey! I've just witnessed Taury Kuenssberg giving Bloody Stupid Johnson a proper grilling over this. 'tis the End Times, I tells 'ee!

Anonymous said...

@ 15:02.

"To be fair to the Scum"?

Have you lost your marbles?

Since when should we be "fair" to Britain's Der Sturmer?

That rag is owned and staffed by far right racist tory liars and cowardly cunts. They should be treated like the diseased political and cultural lepers they are.

History shows what appeasement brings: Disaster.

Unknown said...

Sadly they're mostly people who aren't going to suffer but don't mind at all is someone else does.

RodJ said...

I was a contented pfp Energy customer; mainly because it was the non-profit offshoot of a big social landlord. The first I heard of their problem was an email welcoming me to British Gas. I was £152 in credit to pfp - deliberately so, in case of problems (I'm self-employed and waiting for an operation). British Gas has put me on a variable rate electricity tariff which will cost me about £200 more every year than gas and electricity from pfp.
Had Ofgem asked me, I would have told them I'd prefer to generate my own electricity with my push-bike's dynamo and get my gas from fermenting my own excreta.
Consumer choice? Free markets? Yet another Tory lie ... the arguments against assassination grow weaker by the day.