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Your energy market overview for June 2018
Wholesale energy prices are on the up, but what else affects the price of your energy bill?
Wholesale energy prices are on the up
The energy market is complex and is influenced by many factors. Anything from supply and demand balance, through to political issues, can play a part in the cost of your overall bill.
A recent example of this is a spike in oil prices, due to escalation in the middle east. This saw prices rise to $80 a barrel - the highest since 2014 - and has driven up electricity and gas prices over recent weeks.
Why energy prices are on an upward trend
As well as increases in wholesale costs, other costs in your bill have been rising too. To help reduce carbon emissions, stimulate investments in renewable technologies and keep the lights on, the government launched a series of support schemes.
These schemes include the renewable obligation and capacity market, which are mainly paid for by business consumers. The consensus is that these costs will continue to rise over the coming years.
Our advice to you
When renewing your energy contract, timing and speed of execution are key
- Timing: It’s better to buy energy when the market is lower, not when you’re coming to the last few days of your contract. You can fix a price months in advance of your contract end date, which is something we do as part of our Do It For You service. You can also choose a longer-term contract, so your prices are frozen for longer.
- Speed of execution: When you secure your price, do it quickly. The longer you wait, the higher the risk of losing that price.
Renew your contract as early as you can
To reduce your vulnerability to price rises and potentially save money in the long-term, we recommend you secure a contract now. The sooner you act, the further you stay ahead of the market.
Also, the cheapest unit of energy you’ll ever buy is the one that you don’t need to so please think about your energy consumption and using less To start saving energy now, see our Business Energy Efficiency Guide.