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Should Energy Companies Ripping off Customers be Nationalised?

ConsumerWatch / Household Bills Sep 18, 2009 - 04:25 PM GMT

By: Nadeem_Walayat

ConsumerWatch

Ofgem, Britains' toothless energy regulator announced today what customers already knew that Britians' six main energy suppliers (British Gas, E.ON, Scottish Power, Scottish & Southern Energy, EDF Energy) are ripping off their customers to the tune of more than £170 each per annum. In the face of a 75% fall in the whole gas price energy suppliers have raised prices by 20% on a year earlier, this is AFTER a 35% price hike during mid 2008. The industry representatives have publically replied that they may even raise energy prices further despite the fact that average wholesale prices for power has halved over the past 12 months which is reflected in projected profits for the sector of £4 billion over the next 12 months.


So whilst the Labour Government has been busy nationalising the bad debts of the bankrupt banks, the energy providers have collectively sought to rip off their customers, whilst employing smooth talking spin doctors to calm public anger. However the facts of the abuse of monopolistic powers where any bad trades often called hedging are being more than offset by overcharging retail customers.

Since nationalisation is now government policy, perhaps the inept Labour government should in its dieing months make it a priority to nationalise the profitable energy sector monopoly in the interests of the public good, for once the Conservatives get in power that will no longer be an option.

A quick alternative to nationalisation may be a one off tax on the sector that can help to fill the huge gap between government revenues and expenditures that has mushroomed to more than 12% of GDP putting Britain in it's worst financial state since the Second World War.

Unfortunately for ordinary Britians the only solution is to selectively INVEST in the energy companies to capitalise on the sectors monopoly profits.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 300 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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