The UK is currently seeing unprecedented high costs to the gas market causing 26 energy suppliers to exit the market; as the soaring costs of wholesale gas and restrictive price caps for domestic customers took their toll and the suppliers struggled to stay afloat. Read on to find out more about UK gas and energy prices for business.
We all need energy in our homes, whether it’s for heat, light or electricity. Energy bills are predominantly derived from the price of energy on the wholesale market and Third-Party Costs. The market price of gas has risen by over 590% and power over 688% when compared to this time in December 2020. Since this time last month, gas has risen a further 52.5% and power by a huge 442.2%.
The market price for gas continues to be volatile, having risen by over 50% since this time last month where prices were already high. As a result of this, this year alone, the market price of gas has increased by over 590%; and this is expected to continue in 2022, with month-ahead prices at their highest price in 25 years.
There are concerns about the new coronavirus variant, Omicron regarding gas prices; which is spreading rapidly causing fears that demand will drop if new lockdowns are imposed. Moreover, prices are being kept at record highs despite the new variant. Temperatures are forecasted to plummet which increases the demand for gas and energy stores for all customers during the winter months.
Brent crude has dropped below $80/bbl as fears continued to grow of weakening demand as the Omicron variant rapidly spread within a number of countries. Therefore, this means that the demand for oil is increasing and could potentially reduce economic growth and job creation.
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