Energy profit margins show up in a good graph

Here’s a lovely example of a good graph from the Guardian, 13 October 2012. It’s simple, it’s clear, it’s topical and it tells you something that you can’t easily understand from words or numbers.

Gas and electricity prices, wholesale and retail, rising over time
Gas and electricity prices to the consumer in Britain have risen steadily while wholesale prices fluctuate but stay in the same ballpark (Guardian 13 October 2012)

Pretty simple graph, huh? But the message is really clear, so why make it more complex? The only grumble one might have is that the vertical axes don’t cover the same range, but even I don’t think that’s compulsory in this case. We are often told that prices have to go up because wholesale prices keep rising. In the most recent increase that sparked (no pun intended) this graph, British Gas said the rises were “unwelcome” and “outisde our control”. And indeed they are right – the wholesale prices have gone up quite often… and then gone back down again. In fact, if we believe this graph, they are not very different to where they were six years ago before the credit crunch and recession. The graph confirms what cynical householders seem to suspect, that the price is ratcheted up and only token reductions are made. The profit margin appears to have doubled for electricity and quadrupled for gas. Of course, there may be investment to make in infrastructure out of that profit, but there’s no good complaining about that when you run a privatised industry. If only I’d invested in one of these energy companies… I’d hire someone to do my blogging for me!

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