Should businesses cash in as UK energy prices crash?

Energy prices have seen a mini-crash this winter and customers can cash in on some of the lowest gas and electricity deals for years by renewing fixed contracts now, according […]

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By ELN reporter

Energy prices have seen a mini-crash this winter and customers can cash in on some of the lowest gas and electricity deals for years by renewing fixed contracts now, according to business energy broker ENER-G Procurement.

Mark Alston, Director of ENER-G Procurement said: “Gas and electricity prices currently quoted for March 2014 have dropped by nearly 16% in the last few months and we are seeing multi-year lows for many quoted products.”

But are further falls worth waiting for? Mr Alston reckons so: “We would advise organisations with gas and electricity contracts expiring before April to move quickly to fix prices for at least one year at these attractive rates. For clients with renewals due later this year, it may still be worth waiting to see how the markets evolve in spring/summer.”

ENER-G believes the downward trend on energy prices could continue through to the summer if cold weather and supply disruptions can be avoided.

Their analysts say a number of market drivers back up a positive forecast, such as “downward pressure” on oil prices due to improving supplies on top of the “strengthening” dollar.

Other drivers such as “relative geopolitical stability” plus low price levels for coal and carbon point in the same direction.

Mr Alston added: “Given these indicators for future wholesale prices, those customers renewing contracts in the summer or autumn may want to hold out longer rather than fixing prices right now.

“This could offer the potential of further savings and clearer visibility of future market trends, which we think will point to the wisdom of locking in longer-term deals for both gas and electricity.”

But underlying wholesale prices which are “very attractive” now doesn’t necessarily mean customers will save overall, he added: “Many of the regulated network charges and green levies that make up a large proportion of bills are unfortunately going strongly upwards this year. The only way to be sure of your future prices is to get a detailed price for each site.”

ENER-G has released a free eGuide to energy purchasing, ‘10 reasons why you should be considering your next energy contract now’. Download it online for tips on reducing energy risk and making informed buying decisions.