The global rise in gas prices has already had a huge impact on energy-intensive small businesses. While domestic households still remain relatively protected with the energy price caps, smaller businesses are faced with outrageous quotes for business energy that seems to vary wildly from supplier to supplier. The volatility and the rising costs of wholesale gas are making it hard for SMEs to negotiate a good price with their energy provider. So, when will gas prices go down? And how can businesses protect themselves from rising gas costs?
Why Are Current Gas Prices So High For Businesses?
Current wholesale gas prices are at a record high, with a current rate of £6.50 per therm. Over the past year, almost 30 smaller energy providers have gone bust, with other providers snapping up clients in their wake. In addition, we’ve also had one of the coldest winters of the millennium so far, with many businesses reporting a huge increase in monthly gas usage as a result. The additional demand with fewer gas suppliers (and supply) available has led many of the larger energy providers to up their tariffs. The cold winter has been compounded by the UK’s emergence out of the COVID-19 pandemic, with many suppliers unable to meet increased demand, leading to a further increase in the overall rates. Finally, the Ukraine crisis has also had a knock-on effect on the use of Russian gas in the UK. Businesses with a non-fixed tariff are seeing huge fluctuations in their energy bill, with increasingly high rates to renew contracts. Energy providers are unable to provide consistent quotes to businesses due to the huge variations and rise in wholesale gas prices each month.
When Will The Price Of Gas Go Down
As the world adjusts to the pandemic, with cases and subsequent lockdowns on the decrease, it is hoped that gas prices will drop in the long term, with countries like the US already reporting a steady drop in fuel prices over March 2022. While pricing issues related to the COVID-19 pandemic will hopefully resolve. Europe and the UK are left searching for an alternative to Russian gas and might see prices rise later on into the year.
How Can I Protect My Business?
As a small business owner, gas might be integral to the running of your business, whether it’s heating a care home or running your restaurant’s kitchen. If you’re facing the prospect of an expensive renewal cost with your current provider, you can protect yourself by switching to a fixed-term contract with a new supplier. At Digital Energy Revolution, we can help you find gas prices to meet your commercial needs. We are the first UK-based, commission-free price comparison site for business energy (gas and electricity) and can offer impartial advice on the best rates to meet your business needs. Talk to us today for advice on how to protect your premises from rising gas prices.