Business News

A study by a leading price comparison website reveals that 62 per cent of drivers spend less time behind the wheel due to soaring fuel prices. It could be a ‘double whammy’ for some consumers since high oil prices have a knock-on effect on those with oil-fired central heating. Brent Crude Oil Futures this week had oil priced at more than $97/barrel – currently at its highest for 12 months. It is no wonder those using oil to heat their homes are suffering in this cold winter.

Oil prices have hit a two-and-a-half-year high following protests against Libya’s ruling elite, led by Muammar Gaddafi. Amid the chaos oil companies have evacuated staff from their offices, and the situation has had a knock-on effect on prices. Brent crude rose by as much as $2.70, to $105.28 a barrel on Monday (February 24), the highest since September 2008.

Energy experts have pointed out the inevitability of ‘big six’ energy company EDF Energy putting bills up at the first possible opportunity after its price promise had finished. The company took on many new customers recently mainly due to its winter guarantee, which stated that bills were frozen until the beginning of this month.

Attacks on Libyan oil fields means the commodity has breached the $124-a-barrel mark for the first time since August 2008 after concerns were raised about supply. Brent crude surged by $1.05 to $124.65 a barrel on Friday (April 8). The price rises bring increased inflationary pressures around the world. There are fears that unrest in the Middle East could spread at a time when demand is increasing on the back of strengthening economies in countries such as China and the US.

The International Energy Agency (IEA) is saying the high price of oil is starting to affect demand for energy. The body said it was concerned about supply shortages. The IEA added that global oil output fell by around 700,000 barrels per day in March due to unrest in Libya. It surmised that the price of oil could begin to moderate itself over time, but thought a policy response from oil producers’ group Opec was unlikely.

Small and medium-sized businesses are finding it more difficult to become more energy efficient, according to one expert. Smaller businesses have less funding to siphon off resources for green measures, says Professor Ross King, joint programme director at the Centre for Sustainable Environmental Management-Brunel Management Programme.

Solar companies are taking legal action over cuts to the UK feed-in tariff. On Tuesday (April 19) they filed for a judicial review against Chris Huhne, the energy secretary, for his decision to review the tariffs that boost revenues for renewable power. Earlier in the year ministers said they would end subsidies to large-scale solar power installations from this summer to ensure all money available would go to small commercial or household installations.

New energy bill rules have come into effect from industry watchdog Ofgem. In a bid to protect consumers from unexpected bills, utility providers will now have to give 30 days’ notice of any price increases or changes in their contract that will make customers worse off. Under the previous system, energy firms had up to three months after making changes before they were required to notify customers. The firms have also been criticised for the timing of winter price rises.

The European Commission is planning a minimum tax on fuel for member states which would mean a rise in diesel prices. Under the plans, a new tax based on the carbon content of fuels would apply across member states, at a minimum of €20 per tonne of carbon dioxide. This is likely to affect diesel more than petrol, because most countries currently tax diesel more lightly. Connie Hedegaard, European commissioner for climate change, said: “It will encourage energy efficiency.”

The company that owns British Gas has warned that customers may face higher energy bills. Centrica said “end-user prices” did not reflect the price it was paying for gas on the wholesale market. The firm said in a statement: “In the UK, the forward wholesale prices of gas and power for delivery in winter 2011/12 are currently around 25% higher than prices last winter, with end-user prices yet to reflect this higher wholesale market price environment.”

Almost half of office workers said their offices have become more energy efficient since the recession began. The YouGov survey also found 57 per cent of those polled said their green workplace has led to reduced costs, so it seems ‘going green’ has resulted in managers saving money. The survey also discovered that popular green measures in offices included turning off computer equipment when not in use (67 per cent did so).

Higher fuel bills have been identified as the major cause of inflation, which is predicted to rise to 5 per cent later this year. Speaking on the publication of the Bank of England’s latest Inflation Report, its governor Mervyn King said there remained strong downward pressures on economic growth and upward pressures on inflation. The Bank’s report has included an assumption that gas prices may increase 15 per cent and electricity prices by 10% this winter.