British companies are going through an energy-cost cliff edge in April when the introduction of a weaker authorities assist package deal results in a bounce in payments, commerce our bodies and analysts warn.

Corporations have been protected against elevated vitality prices this winter by a authorities assist scheme that began in October and runs till the top of March, however its substitute, which can final till April 2024, is far much less beneficiant.

Though wholesale fuel costs fell this week and are down by about half since late October they’re nonetheless roughly thrice their degree earlier than the beginning of the pandemic, leaving vitality prices heightened and plenty of firms uncovered.

Vitality consultancy Cornwall Perception warned of a “precarious cliff edge when the enterprise assist scheme involves an finish”, with some companies going through a 70-80 per cent improve of their energy and fuel payments.

“Corporations have been going to must get used to a excessive vitality worth setting, however for some this might have a catastrophic, home of playing cards impact,” stated Robert Buckley, Cornwall’s head of relationship growth. “The extra you pay in your vitality payments the much less you must spend money on your present enterprise.”

Arjan Geveke, director of the Vitality Intensive Customers Group that features metal, chemical and ceramics producers, warned that the steep drop in authorities assist in contrast with another European international locations may put a few of its producers at an growing “aggressive drawback”.

UK industrial electrical energy costs have been greater than these of different international locations even earlier than they escalated in 2022 due to greater community costs and the heavy position of gas-fired energy stations within the nation’s electrical energy era combine, he stated.

Germany, France and Italy have all prolonged and elevated assist for energy-intensive customers just lately on account of the struggle in Ukraine, whereas vitality costs within the US stay far beneath these in Europe, Geveke added.

“Though welcome, the extent of reduction the UK authorities proposes to supply from April nonetheless places UK vitality intensive customers at a aggressive drawback internationally,” the EIUG stated.

The extent of the worth rises depends upon particular person contracts signed however the lower in authorities assist will most have an effect on companies that locked in charges on the peak of the market in August final 12 months.

“There will probably be a small variety of prospects who’ve scrimped and saved over the summer time to purchase at a sure worth and now aren’t benefiting from decrease wholesale costs,” Buckley stated.

Emma McClarkin, chief govt of the British Beer and Pub Affiliation, stated vitality prices have been the “greatest menace” to the business.

“The drop-off in assist come April is deeply worrying, with enterprise house owners unsure about what the subsequent 12 months will deliver,” she stated. “We’d like the federal government to carry suppliers’ toes to the fireplace on passing on drops in wholesale vitality costs.”

Tina McKenzie, coverage chair of the Federation of Small Companies, referred to as for assist for “weak” firms, saying vitality retailers ought to enable them to renegotiate their contracts to learn from the current fall in wholesale costs.

The FSB additionally desires the federal government to introduce a Assist to Inexperienced voucher value about £5,000 to assist firms reduce vitality prices and enhance renewables on the similar time.

Cornwall Perception, which works intently with suppliers to enterprise, stated most firms had continued to pay their payments however there have been “considerations that after the scheme goes there will probably be a whole lot of dangerous debt”.