We’re now well-accustomed to headlines about energy price rises. Last week’s news issued a warning that tariffs have risen by an average of 16% across the ‘big six’ since September.
Consumer switching service Uswitch issued the report, suggesting the increase is a result of rising wholesale prices and the falling value of the pound against the dollar (see our previous blog on what this could mean for your SME).
It’s not just the ‘big six’ who have bumped prices either, with smaller suppliers increasing their prices by an average of 9% since September.
And this increase has been reflected in the business energy market, which has been on a steady rise since June this year.
Every company’s circumstances, usage and appetite for risk are different, meaning that the ways they can approach this issue will be unique.
Extraneous events such as Britain leaving the EU and world elections are making financial markets even more unpredictable, while crude oil prices have risen to just under $50 per barrel – double the price at the start of 2016. And with the pricing of oil mainly in US Dollars, the falling value of the Pound in comparison will hit UK businesses in the pocket further.
This month even saw supplier ‘GB Energy Supply’ go out of business. Managing Director Luke Watson penned a letter to customers on their website, naming “swift and significant increases in energy prices” and their “inability to forward-buy energy to access the best wholesale prices” as the reasons for their closure.
SO WHAT DOES ALL OF THIS MEAN FOR YOU?
It’s not all doom and gloom! As always at GAS, we like to deal in the facts we can be certain of, such as the current price of energy, and use this to our advantage. Phil Andrew, Head of Customer Experience, says businesses must be as sensible as possible.
“The ace that companies have in their pocket is their ability to address their contracts up to six years in advance – something a consumer can’t do.
“A SME owner could agree an energy deal to start in 2020 today, based on today’s market conditions and predictions. If the price of crude oil then doubled again next year, they’d be in a strong position to make significant savings.”
We offer free advice and no-obligation pricing at Great Annual Savings Group. If you’d like to know how much you could save on your next contract, or to secure your business’ future energy price, get in touch on 0800 130 3514.