Over the next 5 months we are seeing a significant decline in costs.
Back in February, 2023 we were looking at summer prices of 15p & 5ppkW for electricity & gas. We are now looking at prices of 9p & 3p. Prices for Winter, 2023 are themselves now in the range of 15p & 5p.
While several suppliers have reduced contract prices they still congregate at 30p & 9p and above. The best prices are unchanged at around 28p & 7p. Standing charges are also worthy of mention as suppliers who are offering lower unit rates may balance this with daily charges of £5+. Consequently, it’s important to look at the overall costs rather than just the unit rates when comparing quotes.
It remains the case that hospitality businesses are more likely to be declined or have special conditions imposed by suppliers. Pubs are less likely to be quoted the best market rates and more likely to be declined on credit. Unfortunately, there remains unscrupulous suppliers and brokers offering contracts to customers on more than double the rated quoted above. It’s essential that operators have an accurate understanding of the market and what “good” looks like.
It had been hoped that suppliers would be offering “blend & extend” contracts where the supplier averages out the energy costs contracted during the price spike with 1 or 2 years of lower rates available today. Though several suppliers are discussing this we’ve seen no contract offers so far and remain unclear how much customers will benefit. In the meantime customers remain on the very high rates that were in place in the second half of 2022.
It’s a universal truth that suppliers pass on increases more quickly than savings, however other factors may be contributing:
1. Suppliers increased margins may reflect them offsetting escalating debts, as more customers are unable to pay their bills, given the end of the Energy Bill Relief Scheme.
2. As they prepare “blend & extend” offers, higher current rates offer suppliers more margin over the new contract term.
Since the start of the year, it has been beneficial to hold off fixing your new contracts as rates have continued to fall. As we move through the warmer months we can expect that commodity costs will rise and this will be reflected in contract rates.
Our team at Nationwide Energy would strongly suggest that customers who are due to renew in the next 6 months contact our field consultants or renewals advisors for a market review and update on the prices available to them.
Fixing in the near future appears likely to be better than waiting for what may be a rising market.
If you are in this position, get in touch via telephone or email:
Are you wasting money? But you don’t even know it?
One of our jobs at Nationwide Energy is to ensure that our customers are using energy efficiently & cost-effectively. More often than not when we visit new customers we find countless ways to save energy and therefore money, but the customer didn’t know.
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