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The wholesale cost of oil and gas are beyond the control of anyone in this country .
Purple,
You think these sort of increases are justified?
When oil decreases in price will the Electricity and gas also come down in price?I think not
You think these sort of increases are justified?
If the ESB were to track their prices with the prices of their raw materials (oil and gas) in the same way that other manufacturers do, then prices would have increased 40% since the last price rise, not the 20% which the ESB is likely to be allowed now.
Though, this disparity doesn't seem to have impacted the company, reporting 2005 profits of €240m.
Are people aware that the government take a large portion of any profits from the ESB each year in the form of a dividend?
Rather than availing of this stealth tax (of sorts) could this money not be used to help alleviate the huge price increases instead?
At the risk of sounding dismissive, that's rubbish.
The price of internationally traded goods are not set by the input costs in Ireland, they are set by input costs in China, India or wherever the cheapest production is available.
In my business the average raw material costs have gone up by 26% so far this year. Labour has gone up by 8% and all of our other costs (insurance, utilities etc) have also gone up.
Despite this our product prices have not gone up (and in some cases have dropped) and we are more profitable and have a higher turnover than last year.
Though, this disparity doesn't seem to have impacted the company, reporting 2005 profits of €240m.
The % net profit being equivalent to scottish power is easy when your a monopoly! That scottish power can make the same profit margin in a competitive market shows how inefficient esb are.€240m on turnover of €2bn+ is only a margin of 10% or so (depending on how big the plus is). That's not unreasonable at all. Remember the ESB needs funds for investment all the time. And there's a massive pension fund deficit. So I think it is justified. Scottish Power have a margin of about the same, and they operate in a competitve market.
And there's a massive pension fund deficit
If the ESB were to track their prices with the prices of their raw materials (oil and gas) in the same way that other manufacturers do, then prices would have increased 40% since the last price rise, not the 20% which the ESB is likely to be allowed now.
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