A case of Gas

Yes, many of us have a case of gas; I used to have it before I moved to Sydney. Many got it as they moved away from Sydney and some have had it all their lives. Whether you prepared Broccoli, made yourself a cheesecake or just because the Chili needs to be hot. Natural Gas is one of the most common ways to prepare your food.

The topic is the foundation of high emotions in the UK.

This all got the high note after Ed Miliband made his pledge to freeze those prices. so was he right? Let us not forget that this all is a commercial enterprise, but should it be?

So a lot happened after the news broke that British Gas would raise prices by 9.2%. You can read about it at http://news.sky.com/story/1155720/energy-bills-british-gas-ups-prices-by-9-2-percent  and the Guardian had a social twist in their story at http://www.theguardian.com/money/2013/oct/17/british-gas-backlash-price-hike-energy-bills

It is nice that many stayed asleep as British Gas was privatised, but that is what happened in 1986. These are consequences of it all. As for competition, that sounds like a nice idea, but when 6 players have a comfortable life not having to fight over one another, slicing a large cake in 6 pieces mean that none of them grow hungry. It is a basic fact of life. Only AFTER 2018, should China become a power supplier through their nuclear plant, only then will these 6 companies wake up. You see, having to make money as a private commercial enterprise comes with the consequence of price hikes.

The question is whether the price hikes are fair. That can only happen when all numbers become open to all for inspection. Oh! I forgot these are commercial corporations; they do not really have to, or do they?

What is a factor is possible comparison to a historic event. The Phoebus cartel! It was a group that all made certain agreements based upon the 1000 hour light bulb. They had a global control on the price of the light bulb. You might not think much of it, but in those days you had to consider that light bulbs would have to be replaced every 3 months. In an average house you might have 1 dozen lights. Now consider that 200,000,000 (over a few dozen countries) people needed to buy 50 light bulbs annually. It might not seem much, but that is the beauty. It is too low an amount to be noticed. Yet, the arranged additional profit of $3-$5 a year (in 1924 that was a decent amount), this still adds up half a billion to a billion dollars for 15 years split three ways. That is a massive amount. This is all a low estimate as I did not completely include businesses. Now getting back to Gas, the entire UK split 6 ways all connected to the same system. So, switching will not hamper any person. Is it so strange that these 6 are playing nice?

So, if there is an unwritten agreement between these 6, then it is important that the numbers are opened up. I am not against profit; I am not against companies having a buffer. I am against people getting bled dry by 6 corporations in agreement. Yet, at that point it is important to have all the facts. I did not agree with Ed Miliband making a half-baked ‘promise’ about freezing prices.

What was the reason for my view?

Oil is getting more expensive, all natural resources are getting more expensive. Can you freeze prices as the providers are getting charge more and more? To ascertain this, the numbers should go out into the open. As for arranging prices Philips has been in deep waters more than once. The recent $1.9B fine as they were one (of several) involved in price arranging for CRT monitors, does not mean that this could not be the case that this is happening in the situation of your gas line. The fact that the gas prices are close together does not make them guilty (they all go to the same network in the end), to not look into such matter would however be extremely irresponsible.

As for the dream Ed Miliband had? A dream to some, a nightmare to corporations!
They have rights too!

 

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