As the global recession and energy crisis escalate worldwide, UK industries and energy firms are also badly affected due to the US-Israel-Iran war.
Companies using heating oil have already begun rationing their fuel use, says Federation of Small Businesses
Thousands of independent businesses across the UK are braced for their energy bills to more than double owing to the sharp rise in heating oil costs as the war in Iran pushed Europe’s fuel market prices to fresh record highs.
About 7% of all small and medium-sized companies warm their properties and provide hot water using heating oil, which in some cases has more than doubled in recent weeks.
Furthermore, the companies in rural areas are often not connected to the gas grid, meaning they have an even greater reliance on heating oil, which is a form of kerosene linked to the cost of jet fuel. It is used by about 17% of rural small and medium-sized enterprises (SMEs), according to the Federation of Small Businesses (FSB).
The trade association has heard from members who have already begun rationing their fuel use to cope with the sharp rise in prices over recent weeks.
“Many rural businesses, including ours, need to rely on heating oil, but the price increases have been extraordinary. Our supplier refused to give us a firm quote for over a week after we booked a delivery and told us the day before that it would be 116% higher than before the crisis,” said one of the business owners.
The FSB, which represents about 200,000 businesses and sole traders, has called on the UK’s competition watchdog to include the SME sector in its investigation into the heating oil market as the global energy supply shock fuelled record high prices on Europe’s diesel and jet fuel wholesale markets.
North-west European jet fuel and diesel prices surpassed $1,900 (£1,434) and $1,600 a tonne, respectively, on Thursday, jumping to fresh all-time highs as market participants braced for a further escalation in the Middle East conflict over the long Easter weekend, according to market intelligence firm Argus.
Additionally, the trade association is also on alert for signs that rogue energy brokers may be able to take advantage of the market crisis to push small companies into signing up to long-term deals on bad terms.
