Business prices for oil and gas soar as electricity costs fall in 2017

Businesses paid more for gas and coal but less for electricity in 2017. That’s according to The Department for Business, Energy and Industrial Strategy’s latest Energy Price Report, which suggests […]

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By Jonny Bairstow

Businesses paid more for gas and coal but less for electricity in 2017.

That’s according to The Department for Business, Energy and Industrial Strategy’s latest Energy Price Report, which suggests while average industrial prices rose by 6.9% for gas and by 9.3% for coal between last autumn and this autumn, electricity prices fell 0.3%.

The report suggests the prices of oil and gas often follow the value of crude oil.

In 2016, crude oil prices were down 16% on the previous year – however, this year’s OPEC agreement to reduce supply until the end of March 2018 saw these prices rise.

Big companies pay less for their energy

The report suggests prices of fuels for the manufacturing sector tend to vary by consumption, reflecting the bargaining position of the larger users.

UK non-domestic electricity prices were lower for larger companies – very small businesses paid around £13p/kWh whereas the biggest firms were charged nearly a third less, at £9p/kWh.

Image: ELN

 
In terms of electricity, average prices in the non-domestic sector increased by 2.9% over the period.

Since the low gas price of 28 pence per therm (p/thm) in September 2016, prices increased, reaching 53p/thm this January before falling sharply to 35p/thm in June.

Wholesale gas prices have risen again over the three months to September, reaching 46p/thm, 63% higher than the previous year.

The volume of both coal and gas being bought and used has fallen as increased numbers of renewables have been brought onto the grid.