Fix now as oil prices tumble

Duncan Banks, CEO at IU Energy looks at what the fall in world oil prices means for businesses: “There has been intense focus from the national media on whether or not the big energy providers will ‘pass on savings’ to consumers and the truth is, they are starting to. Whether or not you benefit as a business in terms of a reduction to your energy bills entirely depends on whether you are under contract or not.  Most of the larger businesses in the region will be locked into fixed term contracts so they won’t benefit from Brent Crude prices falling to their lowest point since April 2009.”

He continued: “That said, if you are out of contract or about to run out of contract, the message is clear – fix now.  It is the probably the best opportunity in years to benefit from cheaper tariffs because oversupply in the oil market will keep prices low for the time being.”

Looking ahead, Mr Banks advises companies to be aware of all of the options available to them and take control of their energy strategy. “Marketplace procurement will always be subject to fluctuations so talk to your energy partners to understand all of the options on the table such as fixed, flexible and basket pricing options.  However, energy procurement is just one key consideration for businesses.  If you really want to take control and not be subjected to the long term rises in energy costs predicted by OFGEM, you really need to be looking at energy reduction technology and investing in renewable sources which, with the Feed in Tariff and Renewable Heating Incentive, could eliminate cost and actually generate income.”