Support for business energy bills will be reduced from April through rebates | Business news

All the companies are set to secure further taxpayer support for their energy bills when the current scheme ends in March, but at a reduced cost to taxpayers.

The government should confirm later on Monday that it has made a decision to apply discounts to wholesale prices up to a year after conversations involving business leaders last week.

It would replace a fixed wholesale price energy costs which the Treasury estimated would cost £18bn over the six-month life of the outgoing Energy Bill Relief Programme.

Chancellor Jeremy Hunt branded the cost “unsustainably expensive”.

However, it is understood that details to be published in the Commons later on Monday will include a higher level of rebates for energy-intensive businesses, such as steelmakers, from April.

The announcement will be made in the context of dissatisfaction among businesses over the time it took for ministers to agree on the scope of the new taxpayer support.

The hospitality sector, for example, further warned that too much reduction in the level of support available to businesses would result in the collapse of a number of businesses.

There is no information yet on what the discount level will be.

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Business energy support will be reduced

A glimmer of hope for struggling businesses, however, can be seen in current wholesale prices.

Despite the ongoing war in Ukraine, gas costs have eased significantly from their recent highs thanks, in part, to the mostly mild winter across Europe so far.

Day-ahead gas costs in the UK, which were 570 pence per thermal plant last August, were 158 pence last Friday.

Contracts for the coming months were only slightly ahead of that price, which is the level before the Russian invasion – the lowest price in 15 months.

Tom Marzec-Manser, head of gas analytics at energy market research firm ICIS, said: “Concerns that there may not be enough gas available for this winter to meet demand have started to fade.

“But that doesn’t mean we’re out of the woods yet.

“The storages have to be refilled during the coming summer, so they are ready again for next winter. And refilling those storages will be much more difficult than last year, since there will be significantly less Russian gas available.”

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