Wednesday, 26 January 2011

Understanding the Fluctuation of UK Business Gas Prices

With the decline of North Sea gas production the UK went from being self sufficient and an exporter of natural gas to being a net importer. This has caused many changes to the UK gas market, mainly in business and commercial gas prices volatility. 

Back in the days when the UK was self sufficient for natural gas few factors influenced gas prices. They were weather and demand, nowadays, the UK gas market has become more complex and several factors have a direct effect on prices.

Since 1998 when the first pipeline between the UK and Europe was opened UK gas prices were automatically hooked to European oil indexed prices. Since then, UK gas prices were determined by marginal transactions. Basically if oil prices raise so does UK gas prices.

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