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LONDON: The United Kingdom plans to slash the wholesale prices incorporated into business energy bills this winter, people familiar with the matter say.

This comes amid the government’s effort to contain the economic damage from spiralling costs.

The cap would limit the maximum costs to about 21.1 pence (RM1.08) per kilowatt per hour for electricity, the people said, asking not to be named because the numbers aren’t public.

The planned discounts are set to apply to contracts signed since April 1 this year and would last for six months starting Oct 1. The final amounts could change depending on market conditions.

Prime Minister Liz Truss is finalising the bailout package, which previously was predicted to cost about £40bil (US$45bil or RM205.5bil).

“We will confirm further details of the business support scheme,” the Department for Business, Energy and Industrial Strategy said in a statement.

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“The scheme will support businesses with their October energy bills, including through backdating if necessary.”

Compared with the current market prices facing suppliers, the cap would impose a discount of roughly 50% on the winter contract for electricity and 25% on gas for next month.

The package will apply to non-domestic users like businesses, charities and public sector organisations, with a review in three months.

Energy prices across Europe have soared since Russia squeezed pipeline flows to the region following sanctions imposed after it invaded Ukraine.

Unlike households, British business energy costs aren’t protected from wholesale market volatility price cap of regulator Office of Gas and Electricity Markets, so many small businesses have closed or faced jumps of as much as tenfold in their bills.

Even with the government’s help, businesses will be paying more than they’re used to. — Bloomberg


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