Energy Price Cap will Monopolise the Market


#1

From the Financial Times

(I’d post the article but they keep warning me about copyright)

To summarise the article and add in a little:

RBC (I’m assuming that’s the Royal Bank of Canada, article doesn’t specify) estimates the proposed energy cap will wipe about 25% off of energy company earnings. A company like Centrica, which is the UKs largest, while taking a hit, will more than likely ride out the 25% hit. How the smaller energy companies will react is unknown however. It’s quite likely that many won’t be able to sustain the 25% loss, and will go out of business. So the big companies, like Centrica, will absorb the customers of those which drop out of the market - monopolising it.

And, with the cap, you’d be severely restricting the incentive for a new company to join the market to increase competition.

So let’s all hope that the cap isn’t implemented.


#2

How are they warning you?

Unless she is doing it for money/personal gain, but I doubt it

Time to buy their shares.


#3

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Are you in agreement with the article or not?


#4

I do agree with it. It’s not good that one big company is able to withstand a government policy while the rest are picked off.