Energy Cap - Is it a Joke?
Energy Cap Price Hike = State Sponsered Robbery
I'll be taking another 10% per year from 1st April 2019
Just as you think the government we pay to look after our interests is finally doing what it is supposed to we get a rude awakening and realise despite all the platitudes they are really only interested in helping their cronies in business to carry on ripping us off.
Harsh, maybe, but it feels so true.
After decades of being fleeced by out of control energy suppliers the government finally 'discovered ' that the industry was systematically robbing consumers and decided (under immense pressure) to act in the interest of the consumers it is supposed to protect.
The solution, an energy price cap, not a real cap and applicable in certain areas only (see my Energy Price Cap Explained post).
But only 6 weeks after it started the Government decided that the cap was too low and selling energy at a fair price would cause these multi-million-pound corporations too much distress so they have announced that the cap is to be raised.
This is government protection - for me
This means that British Gas & Scottish Power are jacking up prices by 10%, Eon, Npower and EDF by 10.3% from 1st April 2019.
Not a thought about maybe returning some of the £billions they have squeezed out of us with systematic overpricing and profiteering.
This energy price hike by greedy energy companies is sanctioned by an out of touch Government more interested in the profits of their cronies companies than the welfare of the citizens who pay their wages.
Why are they doing this?
Prices are rising because Ofgem is allowing suppliers to charge more to cover the higher wholesale costs they face owing to the higher global price of oil. Wholesale costs account for more than a third of a typical energy bill.
Yet today's wholesale oil price is around $50 per barrel in 2008 it peaked at to $145 per barrel.
Come on grandad I've got shareholders to feed
Take a look at this chart and compare it to your energy bills, while the cost of oil has on average fallen back to roughly the price it was in 2009 our energy prices have not followed this pattern, they have constantly risen.
How does this compare to domestic energy prices?
By Feb 2018 according to the Office for National Statistics, The cost of gas had almost tripled, rising by 190%, in just ten years, the cost of electricity had increased by 120% in the same period, meaning it has more than doubled.
In the same period, the average price of all household goods, measured with the Consumer Price Index, has risen by just over 30 per cent.
Lawrence Slade, chief executive of Energy UK, which represents suppliers, said:
Energy companies were facing "drastically rising costs" which were outside their direct control so it was correct for Ofgem to reflect that when setting the cap.
Yet over the years when oil and gas prices drastically fell, why didn't Energy UK reduce prices?
Will Ofgem ever lower the cap when wholesale prices drop, or will outside elements mean that it forever goes up?
Please note that this article is the personal opinion of its author and the views expressed are not endorsed by the Home Heating Shop