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Business Gas Prices

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Gas Price History

Obviously gas price history hasn't a huge effect on future prices, mainly because the UK has started to rely a lot more on imports from other countries. It follows that we are not in such a good position to influence our prices if we aren't producing our own gas. Prices have recently gone higher and higher until recently it has reached a record high of around 140 US$/bbl1.
If prices continue to reach this level the wholesale gas prices in the UK could move between approximately 70 ppth (pence per therm) in the summer and 110 ppth in the winter. This is a huge difference from a few years ago when prices have been in the 30-50ppth range.

The Finance House - Business Gas Prices
When these increases move onto the retail markets this increase in the wholesale prices would eventually lead to a dramatic increase in domestic prices from around 90 ppth at the moment to about 140 ppth. (1 therm = 100,000 Btu (British thermal units), 29.3 kilowatt hours or 25,200 kilocalories)

We offer a full tendering service for all sizes of gas supply and can even work with larger clients to buy directly from the European wholesale markets to achieve the best rates available.

Business gas prices facts

  • At the moment the UK imports about 50% of its gas, however North Sea production is declining at roughly 12% pa. so very soon we will be importing 75%.
  • Busineses usually think they they would need a signature for their contract to renew for the next year, this is wrong. If the contract is not cancelled during the small "window" the supplier can renew for another year, often at double the business gas prices you were paying.
  • Business gas prices are vulnerable as we have only 15 days of storage capacity compared to 99 in Germany and a massive 122 in France.
  • Tariffs and rates can only usually be negotiated during a renewal period or out of contract period (When you are paying high rate)

The UK business gas prices are decided in a traded market where the price is set by what is called the marginal gas transaction. When the first pipeline between the UK and continental Europe was opened in 1998 a link was established between the UK business gas prices and the oil indexed prices in continental Europe. The introduction of Liquefied Natural Gas (LNG) to the UK adds a more global component to UK Business gas prices. In the future the UK will be competing with US and Asian markets for LNG cargoes that can, to some extent switch between destinations across the globe. The UK natural gas market therefore faces a original change both in supplies, a move from domestic gas production to global imports, and in prices, with an increasing link to global gas and oil prices.

Whilst the base gas price level has increased materially recently, the rise in gas prices has been in line with changes in oil prices so the similarity of gas relative to oil prices is within an historically observed range. The growing reliance on imports means the outlook is for a major increase in gas prices although it is expected to remain below parity with crude oil prices.

Our Solution

At The Finance House we provide a hassle free energy management service. We act like an insurance broker, finding you the best prices available. We are completely independent and work with all the major gas and electricity suppliers in the country. Impartial advice and a professionally managed service.

For more information on our Free energy broker service ring us now on 01273 857 024
email  or fill in the form below:

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“One mistake that businesses commonly make is to wait until the last minute before looking for a new energy Supply deal, most fixed price contracts require several months notice of termination….. so it pays to plan ahead”
Sunday Times

‘With so many businesses falling into the unfair ‘rollover trap’ it is essential that companies should look to outsource their energy provisioning to impartial experienced brokers who can manage their energy needs’
Watchdog

Bedford Borough council had budgeted an extra 20% for energy price increases, only to find that its gas costs had risen 83% and electricity by 55%.
Ofgem