Letter published in the Daily Telegraph 23rd August 2022

Ofgem is set to allow energy companies to extract huge amounts of money from British consumers. It could do us all a big favour if it forced these companies to give a breakdown of where this money actually goes.

Of gas supplies to Britain since 2019, about 40 to 48 per cent came from British North Sea fields and 35 to 40 per cent from Norwegian fields (the balance from liquid natural gas shipped from Qatar). The mechanics of extraction from the North Sea haven’t changed over this period – same routine maintenance, same labour force, same pumps. Apart from, say, a 10 per cent increase in these areas, the extraction and pumping costs into the gas network are exactly the same.

Yet under Ofgem’s so-called price cap (due to be virtually doubled in October and then doubled again in 2023), gas companies’ receipts will more than double, providing profits equal to the whole of 2019 income.

As compulsory customers, gas consumers are entitled to ask what the gas companies are doing with their receipts. It is simply not good enough to say, “It’s the market.”

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