BGN Entrepreneur

As the oil prices surged to a record high of $147.27 a barrel in mid-July, the wholesale gas prices are forced to record highs of more than a £1 a therm, which energy suppliers had to pass on to customers this summer. The market effect caused by the short-term surging oil prices was far more than expectation even after the oil price have tumbled.
Today, the UK’s second largest energy supplier—Scottish & Southern Energy (SSE), announced that despite oil prices falling by 62.3% over four months, the customers will have to wait till early next year to see any cuts to household bills.
In the first half of the year, the company’s operating profits in generation and supply fell by 77.4% to £107 million. SSE just gave its forecast after revealing that pre-tax profits have fallen by 54.5 % over the six months to September 30. The dramatic fall in profitability at the SSE was caused by a number of factors, including significant unplanned outages at several key generators, such as a £65 million problem at gas-fired Medway power station, the company’s decision to delay passing higher wholesale power costs on to customers till August 25 and an unusually strong performance of the previous year.
It is indicated by the group that it won’t look to increase its 9 million customers significantly in the next year and wants to make sure to avoid mounting bad debt problems, an increasing problem for utilities suppliers. Like the other rival suppliers, SSE has been derided for pushing up bills for cash-strapped households while still banking sizable profits.

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