Wednesday, 30 July 2008

Pyramid economics

British Gas has a very simple strategy: when wholesale gas prices increase, they put up their prices to customers, and when wholesale gas prices fall, they put up their prices to customers. In a free market, that would be a recipe for failure. But the gas market is not free, it is, as the energy regulator noted, an 'oligopoly' of six major companies, who do not compete, but collaborate to screw their captive public for every penny they can. According to the Independent, reporting the company's £260 price hike:

'British Gas managing director Phil Bentley said: "We very much regret that we have had to make this decision at a time when many household budgets are already under pressure.'

Yeah, I bet he really means it, too. If it was down to me, I'd be tempted to re-nationalise, on the basis that a publicly-accountable monopoly is less offensive than a private cartel, but of course our government, which has the power to cross continents and wage wars, wouldn't be allowed to do this. It has given away all true sovereignty to global corporations that are above the law.

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