Businesses are facing a five-fold increase in gas bills, warns Cornwall Insight.
The energy specialists latest quarterly report into gas markets shows that, on a year-to-year basis, small and medium term enterprises (SMEs) are facing an average bill rise of over 250 per cent.
Wholesale market volatility and rebounding pandemic demand has seen gas prices jump significantly over the past six months, with suppliers withdrawing tariff propositions at short notice.
This is making it harder for SME customers to secure the contracts they need, and may lead to them facing even higher costs.
Fears of supply shortages following Russia’s invasion of Ukraine are only driving prices higher, with natural gas prices peaking at an eye-watering £8 per therm last month.
Prices remain historically elevated at £2.88 per therm.
For context, prices were 42p per therm this time time last year.
While domestic consumers will receive a rebate of up to £350 this year, businesses have yet to see any dedicated government support to manage the record high energy bills they are facing.
They are also not featured in the price cap – which will limit maximum energy bills for average households to £1,971 per year until October.
Senior consultant Craig Lowrey said: “The past two years have been incredibly tough for SMEs, with many still struggling to keep their heads above water. Record high energy bills will eat further into their profits in an already very challenging economic environment.”
Commenting on the potential ramifications, he added: “With many businesses’ supply contracts coming up for renewal in April, there is a significant risk that some will have no choice but to go on to out of contract rates for a period of time. The ones that find deals will still be left with a large increase in bills to contend with – with these costs ultimately being passed on to their customers, further impacting the high cost of living across the country.”