Suppliers are being asked to renegotiate costly energy deals with thousands of small businesses.
Tens of thousands of businesses will face closures unless bills are cut to reflect lower wholesale energy prices, the Federation of Small Businesses, a trade group, has warned.
More than a tenth of SMEs signed fixed-contract energy contracts in the second half of last year, when prices peaked.
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But since then, wholesale natural gas prices have fallen by more than 80%, and the government has sharply cut support to companies since March. Even though many businesses are stuck with high-cost fixed deals.
Energy bills for some businesses have quadrupled since the less generous regime came into force.
According to the FSB, 93,000 businesses could be forced to close, downsize or undergo drastic restructuring due to high energy prices.
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The FSB hopes to be allowed to renegotiate energy supply contracts if small businesses that signed contracts in the second half of last year are paying higher prices than during the winter when the government provided more generous support. I’m in.
FSB Policy Chair Tina Mackenzie said tens of thousands were “in survival mode as they are tied to very high energy contracts… giving small businesses a way out of last year’s market peak tariffs.” It will accelerate progress towards recovery,” he said.
UK energy prices peaked at £6 per arm last August following Russia’s invasion of Ukraine. That price has dropped to 80p per arm for next month’s delivery.
Winter 2023/24 delivery deals are higher, but still pegged at £1 per arm.
Energy UK, an industry association, financial times Its members have already said they are “offering to renegotiate and extend existing contracts where possible,” but regulator Ofgem recently sent a letter asking suppliers to “show flexibility.” is sending
The problem was that the suppliers themselves had pre-purchased supplies on behalf of these fixed-contract customers at then-market rates.
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