Why are electricity prices
rising so quickly?
Why are gas prices rising
so quickly?
With prices in October 2003 rising from 15
to 34p a therm, this is a question many
consumers are asking themselves - so much so
that another OFGEM investigation (the third in
two years) is underway.
Whilst the influences on gas prices are
generally agreed - weather driven demand,
supply issues, including storage,
interconnector effects - the influence that
these factors have on price are hotly
contested. End users and suppliers who are not
vertically integrated with upstream activities
argue that these factors do not explain large
price increases such as those seen in October.
Allegations about possible market
manipulation and calls for much more
information about upstream activities have
followed and resulted in the OFGEM
investigation.
Whilst the outcome of this investigation is
awaited, consumers have no choice but to
continue to purchase in a market heavily
influenced by the price on the day, which can
easily be influenced by factors other than the
fundamentals mentioned above.
Whilst all this may be very unfair, for the
present consumers have no choice but to keep a
very close eye on the market and be prepared
to buy-in at short notice when prices are
favourable.
What is happening to oil
prices?
The trend in oil prices is upward: you can
see a graph which illustrates this point by
clicking here.
However, the trend is being dampened by the
increasing strength of both the pound and euro
against the dollar: the dollar being the
currency in which oil is traded. Click here
to see this illustrated graphically.
The increases in oil prices feed through to
gas prices and, eventually, into electricity
prices.
Note that within the upward trend, the
price of oil varies considerably, so it is
important to keep a close watch on the markets
to determine the best time to buy.
Are pan European contracts
possible?
In a word, yes! Many businesses are keen
to leverage their purchasing power by sourcing
their energy requirements across Europe from a
single supplier. For consumers in energy
intensive sectors such as Heavy Manufacturing,
Chemicals and Pharmaceuticals, this is a
reality. July 2004 will see a major step
forward in the creation of a single market,
when all business users in all member states
will be free to choose their supplier: this
will remove the different eligibility criteria
in different countries, which has created some
obstacles to integration.
Even if you cannot achieve a single
contract, there are still savings to be made
in-country and cross-border by fully exploiting
the opportunities that are available.
What is invoice
validation?
Sourcing the least-cost supplier is only
the start of the process to keep your costs
under control:
Invoices must be checked to ensure that the
rates you negotiated actually appear on the
bills and that you do not get doubled
billed - by your old and new supplier.
You should also remember that your contract
covers only a part of your total bill and
other charges need to be checked too. Click here
for information on the make-up of
your bill.
Checks also need to be made to ensure you
are only paying for your use - for example,
meters on other premises do get wrongly
assigned to your bill - this is particularly
common in relation to gas.
You also need to keep an eye on usage -
leaks are a common source of overcharge on
water, for example. Whilst in the area of
telecommunications such checks can reveal
abuse and misuse of telephones.
Our process of invoice validation checks
all these areas and more and gives you the
satisfaction of knowing that your costs are
fully under control.
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