Monday, 10 February 2014

How can British Gas get away with making triple the profit on Gas than Tesco do on our food???

Can it be right that with every one struggling with our fuel bills, British Gas are making double figure profits on their gas sales???

The profit margins made by the "big six" energy companies when supplying gas are much higher than previously thought

One of the keys is a market with little or no competition and specifically the dominance of British Gas.

Its profit margin is one of the industry's highest and, with 41% of the market, it has the largest share.

It's been open season for attacks on energy companies by politicians for months and with results like this, that seems right.

we laud going for the biggest bully in the playground as if they can get them into line most of the others should follow.

The figures appear to paint a very stark picture.

More important perhaps is the timing - with the first annual competition review into the energy sector due to report next month.

Mr Davey said that so far the debate on energy prices had centred mainly on the electricity market, but that gas accounted for two-thirds of an energy bill for most households.

 Analysis of the profit margins of the energy companies shows that the average profit margin for gas is around three times that of electricity.

There is also evidence that British Gas, the company with the largest share of the gas domestic supply market, has tended to charge one of the highest prices over the past three years, and has been on average the most profitable.

The information has been publicly available for months... we ask why the regulator, Ofgem, had not acted already.

Centrica, which owns British Gas, saw profit margins of 11.2%

SSE also has a high profit margin of 11.4% but a much smaller market share

supermarkets typically run at 3.5% to 5%.

Domestic Gas Supply Margin 

Scottish Power

There has been much anger in recent months over energy price rises.

Last year, the government changed its plan for a green levy on the industry in order to persuade the major energy companies to reduce the proposed increase in bill prices.

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