Britain’s energy suppliers should renegotiate their agreements with small businesses to reflect a sharp decline in wholesale prices, according to a major trade organisation.
The Federation of Small Businesses urged energy providers to assist customers who are still locked into fixed rates. These rates were agreed upon when the world’s energy prices soared to record highs last year. Its appeal comes as numerous small businesses encounter an increase in expenses as the government ends most of its support.
According to the group, about 93,000 small businesses that signed contracts late in 2022 may have to close due to exorbitant costs.
“There are signs that small businesses may be about to turn a corner after last year’s downturn,” said Tina McKenzie, policy chair of the FSB. “Giving small firms a way out of last year’s market peak rates will accelerate the progress to recovery.”
The federation’s request is a challenging one for suppliers who frequently pre-purchase energy for their customers, locking in prices at the time of contract signing. They have argued in the past that changing those agreements could result in suppliers, who already make slim profit margins, supplying energy at a loss.
Customers might be permitted to “blend and extend” their contracts, securing lower rates in exchange for committing to a supplier for a longer period of time, according to the FSB.
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