Domestic price cut signals better times ahead

Move by British gas to reduce domestic bills by 17% signals better times ahead for the business market too, according to energy management company Utility Auditing .

The move by British gas to reduce domestic bills by 17% signals better times ahead for the business market too, according to energy management company Utility Auditing .

February's commercial wholesale gas prices (around 34 pence per therm) have dropped almost 100% since the April 2006 peak when they reached 60 pence per therm ...

and the downward trend looks set to continue.

Jeff Wealands, technical director for Utility Auditing, said: "With the availability of new gas pipelines from the Netherlands and Norway, the re-opening of the Rough Gas Storage Field in the North Sea, plus Liquified Natural Gas (LNG) sources now starting to produce, the indications are that the UK currently has a plentiful supply of gas.

"Last year's huge price increases were caused by gas storage problems, and fear for security of future.

With these fears now diminished, plus the recent spell of warm weather (January 07 was the 2nd warmest on record), prices have returned to levels last seen in August 2004".

Because 40% of electricity is generated from gas, wholesale electricity prices have also followed suit.

"While prices have stabilised and cheaper forward prices are available, the energy market remains highly volatile", added Jeff Wealands.

"Energy pricing is firmly tied to global events and weather patterns, so there are no guarantees of lower prices remaining.

For those businesses who are currently under contract, but want to ensure they find a better future deal, it is possible to lock into cheaper fixed contract rates now.".

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