04-28-2008, 12:16 AM
(This post was last modified: 04-28-2008 12:18 AM by yeti.)
Joined: Aug 2006
Shell and BP earn £6bn in 12 weeks amid fuel crisis
Quote:<span style="color:#000000">Shell and BP earn £6bn in 12 weeks amid fuel crisis
Householders warned of rising power bills as suppliers pass on price rises
John Phelps, The Sunday Herald, April 28, 2008
OIL GIANTS BP and Shell will fuel motorists' anger over the latest surge in petrol prices this week when they are expected to disclose they have made a total of more than £6 billion in profit in the opening three months of the year.
Most analysts believe Shell will show substantially unchanged current cost earnings of around £3.4bn on Tuesday, despite production problems, while BP is expected to show a profits recovery from less than £2bn to as much as £2.6bn on the same day.
The bumper figures are due to be released just as Scottish motorists suffer supply restrictions and further petrol price hikes as a result of industrial action at Grangemouth.
They reflect an increase in oil prices from just over $50 a barrel at the start of last year to an average price of $95.50 a barrel in the first quarter of this year - the price has since risen further to nudge the $120 a barrel mark last week.
But while motorists may be complaining just now, it is becoming clear that the pain is about to be shared by all households in the coming months as major energy companies move to pass on equally sharp increases in the costs of natural gas, coal and wholesale electricity over the past few weeks. Scottish and Southern Energy rounded off the last round of increases as recently as the start of this month when it hoisted its electricity prices by an average of 14.2% and its gas tariff by a hefty 15.2% to reflect increased wholesale prices.
But the increases have already been overtaken by further rises in costs over the past three weeks and industry watchers at Argus Media say that natural gas prices have risen by a remarkable 12.7% since April and wholesale electricity by a massive 18% (see table below left).
Even these increases are unlikely to be the end of the story and contracts for future delivery this Christmas suggest further sharp increases over the next few months.
"We used to expect prices of products such as natural gas and coal to come down over the summer months and some of the recent movement reflects historic contracts placed with Algerian and Russian producers," commented a spokesman.
"But it also seems that these commodities are now running in tandem with the oil market.
"You could blame speculators but they would very rapidly come unstuck if there are not inherent problems in the pipeline, including concerns over the value of the dollar.
"Fortunately for consumers, the major electricity and gas companies get much of their supplies on long-term contracts which have been fixed at lower prices. But these contracts are running out all the time and have to be replaced so it is still going to be painful."
Some industry experts believe prices could rise by a further 25% or so in the coming months - among the first and biggest sufferers will be some 2000 people who signed up with British Gas last summer to have a special tariff for their supplies based on wholesale market prices.
At the time, wholesale prices appeared to be on a downward curve but increases over the past few months mean there will be a painful adjustment at the next review in March.
Many people who pay their bills by direct debit and have still not adjusted their payments to take account of the last round of price increases also face a tough time in the coming weeks.
Some estimate that around 6.8 million now owe an average of £100 already that will be taken into account when the energy suppliers adjust for the increased charges.
Meanwhile, the government is pressing energy companies to give £150 million in support to vulnerable customers by arranging special cut-price tariffs.
The Argus spokesman said that the Grangemouth dispute has been "unhelpful" but has had little impact on the general market outside of Scotland and the north of England.
l BG Group, which supplies about 6% of the UK's natural gas, looks set to report a 50% increase in its own adjusted first-quarter net income to around £680m on Wednesday.
The figures are expected to gain from increased production and a decision to switch some of its deliveries of liquefied natural gas from the US to more profitable markets in Asia as well as the jump in commodity prices.
Analysts hope to hear more news of its share of major oil discoveries in Brazil which are reputed to be among the biggest finds in the past 30 years.
are we sheeple going to do about it? How about forcing legislation breaking up the cartels? How about taxing their profits into oblivion? Do these bastards need any other kind of treatment than sheer ruthlessness?
Have they treated us or the environment any other way?
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