Poverty Stricken Oil company

  Quickbeam 08:57 02 May 2011
Locked

Or are they just putting it on to be contemptible towards the government that thinks they should also suffer their bit? Closure of UK Gas Field

  SparkyJack 09:44 02 May 2011

It at first sight appears to be a case of 'smite the nose to spite the face' act.

If a business it hit with a an extra tax burden - it does seem daft to curtail a revenue stream- or does it?

Could it be to take the income back to a lower tax band?

I seem to recall that many years ago on the domestic tax situation my income was a mite above the low income band where benefits could accrue.

Which meant that 'poorer' families were with benefits better off cash wise than mine[Not with standing the tales of mums at the post office cashing their vouchers then topping up with fags and sweets]whilst other families were less fortunate.

Perhaps there is a deeper 'back story' here

  OTT_B 10:31 02 May 2011

Centrica will continue to supply gas. It's only a question of how much the end user ends up paying for it.

The concept that the recent tax increase was to fund a fuel duty cut was always a feeble, politically motivated stunt. If the chancellor increases tax for the supplier, the supplier pushes up prices to the consumer to compensate.

  oresome 11:36 02 May 2011

It's a straightforward business decision.

If the demand can be supplied from cheaper sources, it will be.

No doubt the economic downturn has meant we have spare capacity at the moment, so which would you turn off first?

  johndrew 11:37 02 May 2011

Quite simple. If Centrica start playing up and damaging energy supplies to the UK, nationalise them. Such an act must be covered under Terrorism legislation - everything else is!!

  OTT_B 11:40 02 May 2011

johndrew

"Such an act must be covered under Terrorism legislation - everything else is!!"

LOL. What brilliant cynicism! Although if the UK government tried that then the European Court of Human Rights would find a way to overturn it ;)

  oresome 12:04 02 May 2011

Ah, nationalisation!

The answer to all our dreams. Super efficiency, no greedy shareholders, no profits to inflate the price. Just run for the customer's benefit.

I'm surprised we've not tried it already.

Oh, just a minute............we HAVE been down that road.

  woodchip 22:37 02 May 2011

nationalisation! And all the Lay-Abouts on the Job you could ask For

  zzzz999 02:02 03 May 2011

Oresome, do you mean nationalised companies like Statoil, that ensure most of the wealth from the Norwegian sector of the North sea flows to Norway, rather than to greedy shareholders:-).

The issue no doubt facing Centrica will relate to return on capital employed. It will have a series of investments and operations all judged on returns from investment. The Government's grab could very likely mean the difference between North Sea investment and operation meeting Group returns and it not doing so.

  morddwyd 07:20 03 May 2011

A project, any project, is either financially viable or it isn't.

An increase in costs, whether by an increase in taxes or any other expense, may make a project non-viable.

Any company that goes ahead with with a financially non-viable project is destined for bankruptcy.

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