The fluctuating cost of business electricity can prove to be both confusing and frustrating. Some months your bill is down, then others it’s up. So, what causes these price fluctuations and are there ways to prevent them?
Here, we’ll look at how the price of oil can impact the cost of business electricity and other factors which may affect your bill.
Do oil prices impact your electricity bill?
The fluctuating cost of oil can impact your electricity bill. However, unless your business fully relies upon oil to heat it up, the effect may not be as significant as you think. This is because, your business electricity bill is determined by numerous factors, not just oil prices. So, while a drop in oil prices could bring your bill down a little, it’s unlikely to have a dramatic impact on the price you’re paying.
Other factors which impact your bill
Commodity markets, such as gas and oil, do have a big impact on the cost of electricity, although oil only makes up a small percentage of gas prices. Other factors which can impact your monthly bills include:
- Cost of carbon
- Weather and natural disasters
The cost of carbon can have an impact on electricity bills as suppliers are charged a level of tax. If the tax goes up, so too will the cost of fuel. The weather and natural disasters can also impact electricity bills. This is especially true if there is a war in the countries which produce oil, as there could be significant delays getting the oil exported. Finally, demand can also have an impact on the cost of your bill. These things combined together do have the potential to fluctuate a businesses energy bills on a monthly basis.
Shopping around for the best prices
One of the best things you can do to reduce your monthly business electricity bills is to compare suppliers. While the factors listed above can cause your electricity bill to fluctuate, it’s also the individual costs charged by your supplier which can make the biggest difference to your monthly outgoings. So, comparing business electricity prices is an effective way to bring your monthly costs down.
So, oil could impact how much you pay for your business electricity, but it’s unlikely to be the main driving force behind your fluctuating monthly bills.