Saturday, August 21, 2010

If British gas suppliers do not control the production and cost of gas how can they garantee a price for 4year

I fixed my gas price 2 yrs ago.The price of gas has risenby%40 in 1 year.If all customers took the chance of fixing their prices now for 4 years, and the raw material cost continues to rise at the same rate,then within 2 years all the gas suppliers would be insolvent.Even if they are now operating at an %80 profit margin they have got problems.The only answer that I can see is that perhaps large new gas reserves have been found and once we have all signed up for the current high price for 4 years the new supply wil be disclosed and the price will fallIf British gas suppliers do not control the production and cost of gas how can they garantee a price for 4year
They could buy futures contracts or options to hedge price movements, so if prices go up, they make their money through the financial markets and make up for the money that they are losing at the pump.

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