Half of businesses' electricity bills to be covered by taxpayers

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Half of businesses' electricity bills to be covered by taxpayers

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 Half of businesses' electricity bills to be covered by taxpayers
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Highlights

  • The UK Government is geared to declare a bailout to prevent businesses from facing bankruptcies over the coming months.
  • The burden of about half of the electricity costs faced by UK businesses would have to be covered by taxpayers this winter.
  • The move would help cut businesses' electricity bills by 50%, while their gas costs would go down by a quarter.

The burden of about half of the electricity costs faced by UK businesses would have to be covered by taxpayers this winter. Following the rapidly rising wholesale prices, the UK Government has declared a bailout to prevent businesses from facing bankruptcies over the coming months.

Business Secretary Jacob Rees-Mogg on Wednesday said that Government would reduce the amount businesses can be charged for their energy bills. According to the reports, this move would help cut businesses' electricity bills by 50%, while their gas costs would go down by a quarter.

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Starting from October, this reduction would remain in place for six months, and it would be directly applicable to thousands of firms' bills across the nation. The price cap is projected to restrict the rate companies can be charged by their energy supplier to approximately 21.1p per KWh for electricity, while for gas, it would be set at 7.5p per kWh.

This is considerably lower than the projected wholesale costs; thus, the Government would make up for the difference and pay the suppliers. The announcement has come just about two weeks after PM Truss announced her plans to limit the average household energy bills to £2,500 per year from October. As energy costs surge, UK investors can keep an eye on the performance of these energy stocks. 

Energean plc (LON: ENOG)

The market cap of the internationally operational producer of hydrocarbons, Energean plc, stands at £2,545.98m as of Wednesday. With a P/E ratio of 50.32, the FTSE 250 company's annual dividend yield stands at 1.9%. As of 21 September, the YTD (year-to-date) return of the energy firm stands at 70.64%, while its return on a one-year basis stands at 83.79%. However, its EPS (earning per share) lies in the negative territory, at -0.54. ENOG shares were trading at GBX 1,453.00 on Wednesday morning, experiencing a surge of 2.98% at around 9:00 AM (GMT+1). 

Hunting plc (LON: HTG) 

The group's market cap offering energy equipment & services, Hunting plc, stands at £455.23m as of Wednesday. The company's annual dividend yield stands at 2.9%. As of 21 September, the YTD return of the energy firm stands at 60.01%, while its return on a one-year basis stands at 36.00%. HTG shares were trading at GBX 271.00 on Wednesday morning, experiencing a surge of 1.12% at around 9:00 AM (GMT+1). 

EnQuest plc (LON: ENQ)

The market cap of the independent organization involved in petroleum production, EnQuest plc, stands at £554.46m as of Wednesday. The company's P/E ratio stands at just 0.91%. As of 21 September, the YTD return of the energy firm stands at 49.20%, while its return on a one-year basis stands at 20.65%, with its EPS at 0.22. ENQ shares were trading at GBX 27.90 on Wednesday morning, experiencing a surge of 2.57% at around 9:00 AM (GMT+1).

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