Gas rates

[epic02]

This time it went up .01 cent it has been going up anywhere from .06 to .13 cents at a time. Hopefully it will start to come down soon. If it would of went up another .13 cents that would of cost me an extra $325.00 now with the .01 cent increase it will cost about $25.00 extra. Maybe there's relief in sight I'm glad I lowered my dryer times when I did. When customers start to realize the natural gas prices are dropping and if you haven't lowered your time already they would be more likely to get upset.


Kenny


http://www.socalgas.com/business/prices/pricing_monthly1.shtml

[Adamski]

Kenny,

My natural gas rates have been level for a few months now. I pay $1.005/ccf + taxes, distr fees, etc. The gas futures market indicates that at some point we might be paying $1.25/ccf + taxes, distr fees, etc. I don't think the worst is over quite yet. Hang on.

Larry /ubbthreads/images/graemlins/cool.gif

[brucehwalker]

I raised my prices to .39/7 min when Katrina hit and never lowered them. Gas prices still aren't as high as it was then. Anyone any higher than that?

[eeedelli]

Wow! I have to say that I'm somewhat envious at how cheap it still is over there! I'm afraid you may be in for a rough time yet.

Over here in the UK, I'm currently being charged 2.933p/KWh (Everything here is metric/SI units, which enables easy comparison between gas/electric supply, which is handy.)

Doing the conversion to therms (ccf) and the £:$ exchange rate, that means I'm currently paying $1.69/ccf plus tax.

HOWEVER - you think that's bad? I've just had my annual contract renewal quote from British Gas and, from September, it'll be going up by ...... 91% !!!!!!!! I'll then be getting charged $3.23/ccf plus tax!!! (I only have the one store and my turnover is below the tax ('vat') registration threshold so I can't claim back any tax payments against income charges either so that'll make my 'real' rate $3.39/ccf !!!)

I'm going to look around at other suppliers but they're generally all quite close to each other so I'm probably stuck with it.

Needless to say, I've just ordered the next set of cams for the old Greenwald timer mechanisms.

[Adamski]

eeedelli,

Two questions:
1. What are your dryer vend prices today?
2. What will your dryer vend prices be after September?

Larry /ubbthreads/images/graemlins/cool.gif

[eeedelli]

Unfortunately, I'm currently undercharging as it looked like I was about to sell up last year so I didn't raise them when I should have done. Unfortunately, the credit crunch put paid to that in January and the deal fell through. I now have to do a load of structural building work in order to bring part of the crumbling Victorian property up to standard so I figure I'm in it for the long haul again. (Isn't hindsight a wonderful thing?! /ubbthreads/images/graemlins/laugh.gif )

Currently (in British units), I'm on 50p for 6 minutes (i.e. 12 mins per £). I will be reducing that time to 5 mins (so 10 mins per £). (Compared to some areas over here, even that is significantly cheaper than some.) Doing the conversions, that means I'm currently giving 6 min 7 secs per dollar reducing to 5 min 6 secs per dollar. That's a 20% rise. I don't think I can really justify more than that in one go as the next increment would result in it being a 28% rise.

However, I'm also raising the wash prices to bring them into line too. The larger machines (25-30lb) will probably be going up 28% (which is the next increment available) and the smaller ones (~15lb) will be going up either 16% or 25% - need to think about that one yet but probably 16%. That way, even though the bigger ones will still be at a slight discount to the smaller ones (which is fair enough), I'd prefer the smaller ones to take the main workload as they're much easier for me to maintain and there are more of them.

Based on those figures, the projections suggest that this will cover three times the projected gas cost increase, though there's two years to cover, given the lack of increase last year and there are other cost rises to take into account too.

However, I may lose some customers (though they'll find soon enough that the competition are already no cheaper than my new prices - I've already checked) and I'll probably also be closed for a few weeks during the major building work, so it's going to be fun trying to evaluate how I've done at the year end!

[Adamski]

eeedelli,

Thanks. So apparently there are 100 pence in a British pound and 1 pound is worth about 1.90 U.S. dollars. I guess if we had your costs over here in the USA, our cheaper laundromats would be charging $1.90 for 6 minutes of drying.

Is the VAT the thing that drives your costs so much higher than ours? Or maybe you have less natural gas available close by?

Larry /ubbthreads/images/graemlins/cool.gif

[eeedelli]

[ QUOTE ]
So apparently there are 100 pence in a British pound and 1 pound is worth about 1.90 U.S. dollars.


[/ QUOTE ]

Spot on with both those points. (This morning's rate is showing $1.94)

[ QUOTE ]

Is the VAT the thing that drives your costs so much higher than ours? Or maybe you have less natural gas available close by?


[/ QUOTE ]

It's a combination. VAT (Value Added Tax) on the vast majority of things here is 17½% and you pay that on top of everything you buy whether you're commercial or domestic.

As a business, if your turnover is big enough, you have to register to become an "unpaid tax collector", so to speak, for HMRC (our IRS) meaning that you have to charge it on what you sell and pay that over to HMRC at regular intervals. However, you can claim back the VAT that you pay on everything you buy, so you're only really paying tax on the difference, though that's still a 17½% hit on your margin.

In addition, there are annual corporation taxes (now going up from 19% to 22% for small business but falling from 30% to 28% for huge mega-businesses) which are payable on profits based at the end of your accounting year.

If you're a *really* small business, below the VAT registration threshold (which I am), you don't have to register and pay 17½% of your income to HMRC but you can't claim back the VAT you pay for goods & services. As a very small business, my energy costs are grouped in the domestic category for VAT purposes and domestic energy is one of the very few items on which a lower rate of VAT is charged (5%) so it's good for me to stay below the threshold, otherwise I'd have to hand over 17½% of my income on turnover but only claim back 5% of my energy bills!

Regarding the gas issue, our own North Sea has been supplying natural gas to the UK and Scandinavia since the 1970s but is now running out. That means that, like most of Europe, we're reliant on imported gas, mainly from Russia, plus liquefied gas coming in giant bulk ships from elsewhere.

That's quite a worry as several of the former Eastern-bloc countries have found out over the last few years. When they've fallen out with Putin, the Russian state-run gas company just switched off the taps! That had a major knock-on effect across Europe as the Russian gas to here flows via those countries. It's scary! Russia's GazProm is now very powerful and they've re-nationalised much of the Russian energy system, once the western partners who helped to re-build it had done so, often (allegedly) finding trumped-up reasons to oust them. The latest is BP where they've alleged irregularities. It's widely believed they want to take over the field where BP have been exploring. We hear that many of the Russian nouveau riche who had become millionaires building up the companies during the Gorbachev & Yeltzin era have had a similar treatment under Putin, ending up in jail or in exile. It doesn't bode well for the future now that he's back as Prime Minster, theoretically under his new president who had his blessing anyway. It looks like the new president is just a puppet installed so that Putin can continue to pull the strings. That's what people are saying, anyway.

To compound the issue, over in mainland Europe, the natural gas price markets are closely linked to the oil price market, presumably to ensure comparability irrespective of supply type. When the UK was a gas and oil exporter, that didn't bother us in the UK too much but now we're an importer, we're finding our natural gas prices spiralling. Furthermore, oil is heavily taxed at source over here. We're currently on something like 60% tax at source - the UK is amongst the highest in Europe on that. Then there's 17½% VAT on top of that on the retail forecourt when it's sold to the public! Although there have been fuel protests all over Europe, there are some strange advantages in that, since the rise in the raw price is only a rise in a smaller proportion of the retail price, the retail price hasn't shot up like it has over there in the US so the effect hasn't been quite as dramatic. Having said that, our retail petrol (gasoline) prices have always been much, much higher than yours, which is why we tend to have small cars over here and that helps to keep our pollution and carbon footprint per head of population well down compared to over there. (Our current price for unleaded gasoline is around £1.20/Litre = $8.81/US gallon. Diesel fuel oil for trucks is about £1.30/Litre = $9.55/US gallon)

This, combined with the massively increasing demand for energy from Asia (especially India and China as they develop rapidly) combined with the reducing supplies is driving up the prices.

We're going to have to find ways to be much, much more fuel efficient. Apart from the fact that burning fossil fuel is destroying the planet, we've used up in 100 years what it took several millions of years to make - so now what are we going to use? As far as the price rises are concerned, over the next decade or two, I'd say "Hold on to your hat - this could be quite a ride"!

[epic02]

Okay, I just got my gas bill.
Last month was $1.08 per therm before taxes after taxes and etc it came out to $1.33 total.
Now this month it's $1.09 per therm before taxes. After taxes it came out to $1.42 I wonder why this is? I was thinking the total cost would be around $1.34 ... every cent cost me about $24.00 extra a month.

Kenny

[kcsockhoarder]

I just check my bill from last June it was at 78 cents it has been at 82 for most of this year until 2 weeks ago, It jumped up to $1.02. Yikes!! If I take in 4000 quarters a week on my dryers cutting the dry time from 7 1/2 to 6 1/2 I would getting a extra $150 a week if the dryers still run for 30,000 minutes Which will more than cover my bill increase. my bill should be going up 150-350 a month ($150 this time of year) So this is my plan for Monday.

[Steven04]

Hey Kenny,

The $1.08/therm and $1.09 listed on SoCal Gas Company is the cost of what the company pays for the gas. SoCal Gas does not produce their own natural gas. They purchase it from different suppliers. So naturally they have to markup the price too, to pay for their own bills. The markup amounts will depend on the season, demand for the gas, surplus inventory, inflation, greed, etc.

So if you look at your gas bill closely, you will notice the commodity tier 1&2 charges, that is what you are being charged per therm before taxes.

You can only use their website to see how much SoCal Gas is buying their nat. gas for, and from that we can only predict what SoCal gas will be charging us before we get our actual gas bill. With the gas prices fluctuating so much its possible that the markups will be higher this month than the last. I'll let you know how much my bill is when I get it for comparison, but it should be similar to yours (1.42/therm ouch!).

Steven

[RichA]

I guess I have you all beat. My last bill was 1.40 therm + tax and delivery.

[Duane]

Gas bill received Saturday...


$1.58 total charge per therm.

[Adamski]

[ QUOTE ]
Gas bill received Saturday... $1.58 total charge per therm.

[/ QUOTE ]

Duane,

So that's what we all have to look forward to. I'm glad I already cut the slots larger on my dryer drop coin meters then.

Larry /ubbthreads/images/graemlins/cool.gif

[petefritz]

I came in around $1.68 totals ( 1.38 plus taxes, and swing/delivery).No way an crank down to 4 mins, it will be years before we get to parity again. Am glad I do not own an airline!

[Sudzbouldercity]

I'm in Nevada and my total Gas cost per CCF including all taxes, delivery charges and service is $1.18 ccf. My dryers are currently at 7 minutes per $0.25.

[zoomnbyu]

Omaha Nebraska paid $1.176/therm for last month. Dryers are at 5 min/.25.

[Steven04]

Kenny,

Just received this months gas bill and it is $1.429/therm after taxes and last months was about $1.34. I wonder what next month gas charges will be...