Natural Gas company Nuon is making double profit !!
>from Telegraaf.nl
Probably I am becoming boring – and you could call me repeatative….
But again – I am wondering how it works with all that oil and gas prices…..
Our energy company in Holland – called Nuon – announced for the 2nd quarter of 2008 a double profit comparing to same period last year….
Totally nothing wrong with that – good management – good people at work…..
There are so many reasons they could do this….
But; I am in the shoe business – we have periods that the materials are getting more expensive…. We have to pay more to the factory – and we ask more money for the shoes….
This does NOT make us make more profit……
NOW; the main materials (natural gas) for Nuon got waaaaaay more expensive…
And THIS made their profit double….
Uh…??
So – how does it work…??
We pay our natural gas – for example; 10 euro for uh… certain amount (Nuon makes 2 euro profit out of this)
Gas is getting more expensive – and Nuon tells us we have to pay 14 euro for the same amount…
Okay – big raise – but if the gas is really gotten this expensive – then we have to pay the 14 euro….
And later on; Nuon announced doubling their profit…..
So – they made 4 euro profit. Uh… they raised their price with 4 euro…. – so half of this raise was making more profit…??
Okay – I will tell our (shoe) management how to solve this “price raising of materials” for us…..
Sorry people; your shoes will become more expensive (AGAIN)
The price of natural gas is linked to the oil price. If that goes up, so will natural gas.
Good for the government (more tax revenue), good for companies like Nuon, but definitely not good for us, the end consumer…
Soon we’ll pay an arm and a leg for natural gas as well, like we already do for gasoline, despite the fact we’re sitting right on top of natural gas fields and the low costs of bringing the gas to the surface…
In some kind of way I do understand the link between oil and natural gas etc…
The main thing I totally do not understand that IF gas (or oil) is getting more expensive = the oil and gas companies are making more profit….because of the higher prices….
If you ask the government why it works like this, the answer is probably that the companies do make more profit in times of high oil prices, but on the other hand, they risk lower profits in times of low oil prices.
Doesn’t explain why they need to make a profit in the first place. It was probably best to leave the production and distribution in control of the state, put some tax on it, but the extra profit on top going to these companies is not really necessary.
The party will be over in the foreseeable future, though. The most important gas field in The Netherlands, Slochteren, will be in decline by 2020 or 2025 that supply can’t keep up with demand. Unless we cut demand, from then on our supply will more and more depend on other countries, like Russia. A few times we’ve already seen a cut in delivery to countries in western Europe, due to disagreements between Russia and Ukraine. So it’s not always very reliable…