Gas Prices

[Dagman]

I'm struggling to understand why gas prices are rising, what exactly is the bare bones reason, is it corporate greed? What is the justification? Is it costing more to get the extra gas they, say is in demand, out of the ground? What does the extra money actually do? If the gas exists and is available what's with the rises? If they have the capacity to supply anyways it does it cost them more in machinery or refineries or labour if there is extra demand? Thought we'd had mild winters anyways! Tia.

[barry1010]

Why are gas prices so high?
There's been a worldwide squeeze on gas and energy supplies.

A cold winter in Europe last year put pressure on supplies and, as a result, stored gas levels are much lower than normal
There's been increased demand from Asia - especially China - for liquefied natural gas.
This has helped push up wholesale gas prices across the world. Since January, they've risen 250%.

https://www.bbc.co.uk/news/business-58090533

[youngmafbog]

Do you mean Gas (Petrol) or Gas for your boiler?

Gas for your boiler is a problem for a couple of reasons. One main one is that Asia (incl China) has been buying up a lot of Gas stocks which is creating a shortage and with good old supply and demand the price has risen.

In addition countries like the UK have not invested in Storage which would have helped cushion it, neither have we been investing in Nuclear or Coal or Fracking meaning we are heavily reliant on gas, again using up the limited supply.

[Dagman]

They don't explain what extra cost covers, just keep on about increased demand, does it go into employing more people or machinery etc to get the gas to us? Where does the money go? What is it's use? Thanks.

[Dagman]

I mean domestic gas in uk.

[Gromit]

When an item is in short supply, increased prices cut demand.
If a company (Gazprom) has a commodity everyone wants, then understandably the maximise how much they charge for it.

My beef is that during the lockdowns, the demand was low and the price fell - but our tariffs and bills didn’t.
Now wholesale prices are back similar to pre-pandemic rates, the want to double our bills.

[Dagman]

That's how I see it too, to me corporate greed if that's what you're indicating? All I ever see is news with high demand being the cause, but that is not the cause, like it is being skirted around to avoid the actual reason. I find it annoying not even tabloids go far enough to explain it instead accepting what they seem to be told.

[ichkeria]

Three reasons at heart:
Demand is up, particularly after the pandemic
Supply is suspected to be down as Russia cuts supplies cynically
The wind has refused to play ball by inconveniently blowing less
The first issue is presumably not forever
The second is unproven but it would be nice to see it proved one way or the other
The third: everyone start puffing …

[Gromit]

18 months ago everything shut down, demand was low and the wholesale gas price plummeted.
But our domestic bills didn’t go down. They were still charging high prices when the gas was cheap.
Now demand (and prices) are back to pre-pandemic levels, they are trying to to put our bills up.
They are all crooks - Putin, GazProm, Eon etal.

[bobbinwales]

If there's any greed it's the producers not are energy company's here. Like with oil the gas producers can increase or reduce supply easily. The energy companies then bid up the price as they all need supply's to serve customers. The producer's get a higher price but sell less so may not make as much more as you think but overall are trying to make max profits so may be greedy. Are energy company's and across the world end up paying double. Russia etc will after increase supply at some stage or it's staff will have no work. Eventually as supply go's up crude raw prices will fall back. Shame we didn't continue with feacking and get more from north sea then we'ere not so tied to Russia supply's.

[DTCwordfan]

There are three principles at work here - Russia (read Putin) wanting acceptance for their pipeline across to Germany and the European network and not passing through Ukraine - so more control to them and a snub to Kiev. Secondly, the Chinese are in the market looking for every drop of LNG going - market demand for their factories and, thirdly, the ongoing spat between Algeria and Morocco, the former having shut down exports across Morocco to southern Spain - some is coming across from them to eastern Spain by a direct line but not enough and in the wrong place. This spat goes back to Trump having backed Rabat over who owns Western Sahara - and there have been some accusations about who was responsible for forest fires on the border and incidents in the area of Kabilya as to the Berbers. Morocco's acceptance of Israel hasn't helped the pot either.

[youngmafbog]

//If there's any greed it's the producers //

Odd, I thought it was a traded market, like oil.

[burlyshirley]

Goes up every damn winter, nothing changes !