Liebrary: Are Britain's energy companies' charges for domestic gas & electricity really the lowest in Europe?

One of the true things energy companies say, (and never forget, the most effective rip-offs are done without lying) is that the UK has low domestic gas and electricity prices compared with most of the European Union. This statement has often been used by energy industry apologists to squirm out of a tight interview. 


The interviewer almost never knows the hidden truth behind the truthful facade.

What the apologists are rather shy about is the fact that the price difference is due to UK taxes on retail energy being about the lowest in the EU. If you strip out the government taxes - money which doesn't go into the pockets of the energy companies - UK energy prices are about the same as the rest of the EU.


Figures from the Household Energy Price Index for Europe (HEPI), show that the cash pocketed by the British energy companies is about the same as in the rest of the EU, in spite of them using the "UK's lowest prices" argument for their price hikes.

So that's ok, isn't it? We pay about the same as our European cousins?


Actually, it isn't. 


According to the International Energy Agency figures for 2010, Britain is 60.9% self-sufficient in Natural Gas, which is the source of gas (naturally) and electricity generation in the UK. 

Contrast that with the other European Union nations who have to import anything between 80% and 98% of their gas.


British energy companies claim to run on wafer-thin margins by moving their profits from downstream (selling to customers) to upstream (sucking the stuff out of the good Earth). 


Of course, the energy industry has a whole quiver of fibs, including:

• Retail prices go up with wholesale prices, but fail to come down with them.
• The accounting trick that allows them to fib about low profit margins.
• Confusing pricing that, according to the head of OFGEM in evidence to Parliament, has meant "40% of consumers who have switched [supplier] have switched to a weaker deal"
• Doorstep selling tactics described by the parliamentary energy select committee as "Del Boy sales tricks", tricking customers into worse contracts by contacting them individually at home.

While other countries who are dependent on imports can plead that global wholesale price force them to put their retail prices up, the British energy companies have no such excuse.


International wholesale energy prices (which for the European gas market is in any case rigged to follow oil despite the extremely tenuous supply/demand connection between oil and gas) is a cover for them doing something not because they have to, but because they can.


International Energy Association figures for Natural Gas.

According to the charity AgeUK, 

"Each year in England and Wales, many thousands of people aged 65 and over die needlessly in the winter months. This is often because older people can't afford to heat our homes and they are more susceptible to illnesses caused by cold and damp. Age UK is campaigning to reduce the number of excess winter deaths.

The latest figures show that last winter (2010-11) there were almost 22,000 additional deaths among people over the age of 65 in England and Wales.

The cost to society is enormous. For every additional winter death, there are also around 8 admissions to hospital, 32 visits to outpatient care and 30 social services calls."

The Big Six choosing to impose high prices on consumers is simple profiteering, with the profits paid for by everybody. 


The poor and vulnerable sometimes pay with their lives.