The Cost Of Energy & What This Means For You
Commodity Costs over the last few weeks have shown some modest downward movements and the cost of electricity and gas for the next 12 months are 15p & 5ppkW respectively. Energy prices on offer to customers on a fixed price contract have also shown some reduction with the very best rates for gas falling below 10p and electricity around 30ppkW. However, choice for pubs remains heavily restricted as many suppliers either have a ban on pubs or impose other measures which increase costs. Operators will often have few alternatives beyond their existing supplier and the rates they offer. Prices are typically mid-30’s for electricity and 12-15p for gas, though many others are higher still.
Deemed rates continue to be a concern with the highest seen recently at £1.50pkW for electricity and 52p for gas. Many deemed rates are much lower and customers continue to receive the Energy Bill Relief Scheme (EBRS) variable rate discount of 34.5p on electricity and 9.1p for gas. Customers on deemed rates may be better off presently but this is unlikely to continue beyond 31st March. Those in that position should take steps to find fixed rate agreements as a matter of urgency.
As the end of the EBRS on 31st March approached many pubs face a dramatic increase in their energy costs. Most as risk are those who agreed contracts from June to November as their rates are likely to be very expensive. Pubs who agreed contracts in this period will typically see an increase of several hundred to over £2,000 per month and potentially more for larger sites.
Many pubs will continue to trade regardless until the end of their current contracts. At this time only 1 supplier has indicated that they are offering a “blend and extend” contract, which is subject to a credit check. We continue to advocate on this to suppliers that they have an offer in place to help business find a solution to these very high costs. Failure by suppliers to address this issue will surely cause the failure of many pubs.
Nationwide Energy has a range of energy saving advice (see below). In addition, our team of regional consultants are available to provide comprehensive advice on the energy market.
Do you need further support? Get in touch:
Tel: 02476 328995 or enquire online.
Whether you own a pub, restaurant, club or any other hospitality premise, we have you covered. Our team have pulled together a range of energy saving tips that you NEED to implement.
All operators should be finding ways in which to save energy, and these FREE guides can do it for you.
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We also offer a range of Merchant Services such as EPOS & card machines to streamline your business.
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