July 2004
Energy Price Brief
Over the last 12 months electricity prices have increased by 40%, and gas prices have increased by up to 35% for some users.
Energy prices have consistently been increasing and those who watch the energy markets do not see a major change in this situation in the short-term.
The end of June saw gas price rises of 6-7% due to continued concerns about adequate gas supply to cope with a severe winter. Such volatility in the marketplace has meant quotes from energy suppliers are not available for long periods and therefore it is important that buyers are in a position to accept contracts by the end of the working day. However, with many companies facing huge increases in energy costs, buyers feel they need to seek authority from senior management before they close contracts. This is fine if senior managers are at hand to make a prompt decision, but if they are not then the company could be faced with an even higher prices rises and find that energy suppliers may be less keen to re-quote.
In the current market, many energy suppliers seem to be looking to retain business rather than actively seeking new business. The months to October are expected to be a busy periods as many companies come out of contracted periods.
The recommendation is that companies who need to renew their energy supply contracts should have their tenders out in the market now to take advantage of any dips in pricing.
To get further advice with regard to energy management and energy contract negotiations, please contact Aneeta Patel on 024 76 279 000.
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