Fuel prices and dividends

We were looking at a news article about fuel price rises the other day, and how some people are struggling to pay. Apparently Centrica are warning of further rises over the next year. Robin asked whether Centrica had paid dividends to its shareholders recently, so we looked it up.

Apparently Centrica paid 10p per share as the final dividend for 2010. Multiply this by the number of shares they have on the market, and this works out as equivalent to £150 off the energy bill of every household in the country. So at a time when people are struggling to pay their fuel bills, a chunk of that money goes straight into the pockets of the shareholders.
Of course, if you didn’t pay dividends, would shareholders invest? And there’s an argument in favour of higher fuel prices. If it encourages people to insulate their houses, turn down their thermostats, and generally use less fossil fuel-generated energy, this is probably a good thing. But there comes a point where you have to turn the heating on to survive. There’s not actually a lot of choice – for all the different providers there are, you really can’t shop around the same way you can with food or clothes, picking up a bargain when you see it. And it doesn’t exactly seem… efficient… that the government should be paying winter heating allowance to people so they can pay bills which are artificially inflated by these dividends.
So we looked up the Co-operative, to see if we could get them to provide our electricity and gas. They do, but they don’t seem to serve our area. We couldn’t even get a rate comparison. However, our current provider gives us nearly the cheapest rates, on a green energy plan, with decent service, so we’ll probably just stick with that for a while yet.
Me, I’m still looking to home generation to provide real competition. Photovoltaics would take 75 years to pay back the installation price at current rates, but I’m holding out great hopes for hydrogen gas generation by artificial photosynthesis. Maybe in another decade…

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