When was the last time you saw a headline reporting something was getting cheaper or easier for UK businesses? It has certainly been a while.
Political, environmental and economic uncertainty are wreaking havoc with business owners’ long-term plans and forcing everyone to hedge their bets with strategic decisions.
Brexit’s weakening of Sterling (the pound is now worth 14 per cent less than on the eve of the referendum) and various associated pressures, such as a lack of skilled workers and the worst run of business investment since the financial crisis, are driving variable business costs up across the board; not least energy prices. Those businesses who are able to develop some protection with price increases and changes to terms and conditions are already doing so.
The wholesale price of gas and electricity is forecasted to continue rising throughout 2019. Limited gas storage in Europe, increase distribution and transmission costs and the political factors mentioned above are pushing prices ever-higher.
So, can we wave goodbye to getting better deals?
Comparing today’s prices with those even as recently as 12 months ago reveals a startling leap. Due to this, it’s simply not possible for suppliers to offer the same prices they did when the market was cheaper because they’ve paid more for the energy themselves. In addition to this, the cost of transmitting and distributing energy around the country is also rising.
We realise we’ve used a good few acronyms in the last few paragraphs. The energy industry is full of jargon, so we've offered a quick solution to this with our Jargon Buster.
This means that, usually, it’s going to be very difficult to improve on a rate you procured 12 months or more ago. Even a procurement expert will struggle with this. But, here’s the main point of this post…
You can still save money.
What this means in practice is that quality energy brokerage has become even more important. It’s now essential to interrogate the market to deliver savings against your current supplier’s renewal price, more so than ever. Because of the current nature of electricity and gas, you need to be sure that the new price you’re offered is the best possible. With suppliers being squeezed on profits as much as your business, they will try to widen their margins on apathetic customers who don’t switch regularly. Who could blame them?
The opportunities to save on your energy costs are becoming harder to find. They may be hidden in the minutiae of contracts, but they still exist and can be exploited by someone with the right knowledge of the industry.
At Great Annual Savings Group, we manage hundreds of millions of pounds of procurement for these suppliers, giving us leverage to call in favourable terms to help our customers wherever possible.
If you have received a renewal and want to know whether it’s a good deal, get in touch for a free assessment. Despite the rising market, don’t lose hope; there are still ways to ensure you’re on the best deal possible.