We are now deep in the winter months. And for many businesses, even those who dont use gas as part of their core business processes, it means in increase in gas usage and the impact that will have on business energy bills.
Meanwhile the current energy environment is a confusing – and at times contradictory – scenario that includes, on the one hand, falling gas prices; and on the other, fuel poverty and very real rising human casualties. Time, we thought, to investigate:
Let’s deal, firstly, with fuel poverty. The Department for Energy released a report in the summer of this year and concluded over 10% of the UK was unable to afford proper heating through the last winter, a staggering two million households. And the cold, hard fact remains that that contributed to the deaths of an estimated 10,000 people in 2013.
In terms of electricity, the UK still faces supply problems. You may have seen news reports about the dwindling power reserves in this country, and the fact the government is adopting emergency measures to avoid the risk of blackouts this winter. The ability for the UK to produce extra power is the worst that it’s been since 2007 and that is all compounded by the fact we are functioning with a creaking electricity production and distribution infrastructure.
UK gas prices at record low
Now set all that against the fact gas prices in the UK have actually fallen to a record low. The fall is the direct result of the fact that Russia and Ukraine – often at political, and indeed military, loggerheads over energy supply – have recently agreed to an energy supply deal to secure the transit of gas between Russia, Ukraine and the EU, until the spring of next year.
It was the EU that ultimately stepped in to broker the deal between Russia and Ukraine. Sanctions against Russia will remain in place, but the EU will essentially act as guarantor for the Ukraine and its ability to foot the bill. And so Russia has now turned the taps back on, creating confidence in the market that energy security had been guaranteed.
And that had an immediate effect on prices. Last December, gas traded at 54.6p per therm but it recently dropped to 52p per therm, an all-time low since the contract was opened to the market. It is now up a little, to just over 52p per therm.
It is obviously now hoped that the fall will drip down into a reduction in prices at the consumer end of the process, so that in both domestic and commercial settings, there need be less concern about turning the gas on. In the UK, the campaign group Fuel Action Poverty have certainly been successful in lobbying for the Energy Bill of Rights, recently launched in the Commons, with the intention of making energy fairer, affordable and sustainable.
However, although the news from the energy market is positive, we are by no means out of the woods. The polar divide between the proponents, and opponents, of renewable energy sources for instance, remains. On the one side, the environmental lobby continues to advocate environmental concerns around fossil fuels and stresses the need for affordable, renewable energy. On the other, members of government continue to highlight the unsustainability of such sources – not in the energy itself – but the processes involved with its production and distribution.
Buying group prices remain the best
Despite the fact that it remains a mixed picture, we are as confident as ever that you can get the best UK business gas prices anywhere through our gas buying group. Try our calculator and see how much you could’ve saved!