The Oil Contradiction: Heating Houses Goes Up As Petrol Costs Go Down

October 18, 2013 1:37 pm

In the last few days it has come to light that this winter we can expect a 10.4% rise in heating bills from British Gas and other home energy suppliers in the UK. This might seem slightly confusing considering the cost of petrol has just seen its sharpest decline since 2008 making it more affordable than in recent years. The consumer would be forgiven for expecting both car fuel and home fuel to be in conjunction with each rather than delivering the exact opposite in terms of pricing.

However, there are a couple of reasons for this recent trend that are almost nothing to do with the price of oil at all. Take, for example, Shell – one of the UK’s leading car fuel brands and a worldwide energy giant. They have recently taken on new technology which allows them to get as much as tens of millions of barrels of oil out of their drill sites than they were previously getting. On top of this they have new technology which plots seismic activity in their wells cutting time costs, production costs and increasing efficiency which eventually equates to us, the consumer, being charged less for their product.

British Gas and home energy giants, on the other hand, have an ever increasingly complicated job in collecting energy, sourcing it and distributing it from the many different outlets they need to use to ensure gas travels to every home in Britain. The danger is that if they do not keep up with technology and find newer, more affordable and more efficient ways of transporting gas to our homes, then it will be us, the consumer, who will end up paying the price.

The technology exists or is beginning to exist to allow these companies to cut their prices and keep the costs down for energy in British homes. It needs to be applied and applied quickly because there are many UK citizens who will seriously struggle to pay the rising prices of gas this winter.

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