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UK Business Gas Prices
“Fuel prices soar to record high” The Independent April 2006 “ The price cuts are welcome but what took them so long?” Financial Times Feb 2007 The headlines can be very confusing for businesses and when it comes to contract renewal it can be difficult to know whether you are getting a fair market price for your gas contract. Many customers will find they will be paying considerably more for their gas due to the market volatility. What’s behind the price volatility? There are a number of factors but the main ones are : Supplies of gas: supplies from the North Sea have declined faster than they were expected to, though there is still plenty to last for many years to come it comes at a more expensive rate. This means that the UK is much more dependent on gas from Europe and is therefore influenced by this market Price of oil: due to increasing troubles in the middle east and increased demand from developing countries such as China oil prices have risen hugely in recent years and, with the price of gas in Europe still largely linked to oil this has had a knock-on effect on the price in the UK. Storage facilities: new import and storage capacity in the UK is not yet fully on-stream, and has therefore not been able to offset the impact of the above two factors. Why does it affect the price of business gas more quickly than the price we pay at home? Suppliers price each business gas contract individually based on prices on that day, whereas prices for domestic gas are hedged a long time in advance. Will prices stabalise? The trend of volatility looks set for the foreseeable future, spelling danger in terms of profit margins for businesses large and small. PH Business Services can help you to source the best tariff for your business gas contract and guide you through the minefield presented by today’s market. Call Freephone 0800 0436771 now for a quotation or impartial advise on your gas renewal offer. |
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