BICS weighted Scotland estimates: data to wave 66

Gas and Electricity Prices

In Wave 66, businesses not permanently stopped trading were asked about their gas and electricity costs – the specific questions asked are shown below. 

Gas/Electricity Cost questions: Are your business's gas/electricity costs fixed or hedged?

• yes, expiring by 31 December 2022    
• yes, expiring by 31 March 2023
• yes, expiring after 31 March 2023       
• no, gas/electricity prices are variable  
• not sure       
• not applicable

An estimated 43.9% of applicable businesses reported that their gas prices are fixed or hedged, rising to 57.6% of businesses in the Manufacturing industry sector.  An estimated 12.2% of applicable businesses reported that their gas prices are variable, rising to 21.7% of businesses in the Construction industry sector. 

In Wave 66, 54.0% of applicable businesses reported that their electricity costs are fixed or hedged, rising to 63.7% in the Wholesale, Retail, Repair of Vehicles industry sector, and 63.2% of businesses in the Manufacturing industry sector.  Overall, 13.0% of applicable businesses reported that their electricity prices are variable. 

In Wave 66, applicable businesses were asked about new arrangements made with gas and electricity suppliers following the end of a contract – the specific questions asked are shown below. 

Gas/Electricity Contract questions: If your business had a fixed price contract for gas/electricity end within the last 12 months, what were the new arrangements made with your supplier?

• moved on to a variable price contract 
• new fixed contract at higher price       
• new fixed contract at the same price or lower        
• fixed contract has not ended within last 12 months
• not sure       
• not applicable

Figure 3: Of businesses with a fixed price gas contract that ended within the last 12 months, 28.9% have a new fixed contract at a higher price, rising to 40.1% in the Manufacturing industry sector.  A further 9.0% of businesses reported that they have moved on to a variable price gas contract, and 5.7% of businesses have a new fixed gas contract at the same price or lower. However, the majority of businesses were not sure about what new arrangements had been made.

Source: Office for National Statistics – BICS – Weighted Scotland Estimates – Wave 66

For businesses with a fixed price electricity contract that ended within the last 12 months, 31.2% of businesses have a new fixed contract at a higher price, rising to 43.3% of businesses in the Accommodation & Food Services sector, and 43.2% in the Manufacturing industry sector.  An estimated 8.5% of businesses reported moving to a variable price electricity contract, and 4.8% of businesses have a new fixed electricity contract at the same price or lower.

In Wave 66, applicable businesses were asked how much they expect the business's gas and electricity bills to increase once their fixed contract ends– the specific questions asked are shown below. Note that the majority of the responses to the Wave 66 BICS survey were provided prior to the chancellor of the exchequer’s fiscal statement on 23 September 2022. 

Gas/Electricity Bill Increase questions: How much do you expect your business's gas/electricity bill to increase once your fixed contract ends?

• more than 300%    
• between 200-299%         
• between 100-199%         
• between 1-99%     
• do not expect business's gas bill to increase
• not sure

Figure 4: In Wave 66, around a fifth of businesses (20.9%) reported that they expect their electricity bill to increase by between 100-199% once their fixed contract ends.  A similar share of businesses expect their gas bill to increase by this amount (19.9%).

Source: Office for National Statistics – BICS – Weighted Scotland Estimates – Wave 66

A further fifth of businesses (20.4%) reported that they expect their electricity bill to increase by between 200-299% once their fixed contract ends.  In Wave 66, most businesses reported that they were not sure how much their bills would increase once their fixed contract ends – this was the case for both gas and electricity bills (39.5% and 33.9% of businesses respectively).