Why are electric and gas bills going up, but oil companies making record profits?

Question

I thought the reason they were increased is so we could get the same power with reduced supply?

However a fair few power companies are reaching ridiculously high record profits, which goes against the grain of that idea.

In: 16

Answer 1

It’s an auction. Purchasers bid prices up over each other’s offers. If supply tightens, like in any auction market, the purchasers will bid higher. The gas market is currently constricted by Russia cutting supply. Companies selling gas find higher bids for their product…. and reap a greater profit because their cost of production hasn’t gone up.