And of course, what’s happened is that so many of the small competitive firms have gone to the wall leaving the huge greedy [email protected] a clear field to profit unencumbered by those pesky little firms. Not exactly good for competition is it.The reason domestic gas prices are not based on the day ahead price is the one that has recently bust loads of energy supply companies. Namely that as we have a price cap, when the short term price rises above the cap then you are losing money hand over fist, and eventually run out of money. Lots of small energy supply companies were trying to buy gas and electric on the short term market and sell to domestic customers, which worked while the short term prices were generally lower than the cap. But as soon as there was a sustained rise in short term prices they were trapped, as they couldn't raise prices to the consumer, due to the price cap.
Thus the problem is (as almost inevitably is the case) the result of the State interfering in markets. By placing a price cap on energy bills they have ensured that supply can only be priced based on long term wholesale contracts. This means that (as is the case now) when short term prices are below long term ones then consumers are paying over the odds. But of course when short term prices are higher than long term ones the consumer is better off under this system. Swings and roundabouts. So unless last winter you were demanding to pay sky high short term prices for your gas and electric, instead of your State capped price, then you have no right to complain now that you should be benefiting from the current glut of gas in the UK, and subsequent cheap day ahead prices.