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"Energy Prices Soar 700% And Threaten To Push
Businesses To The Brink Of Bankruptcy This Winter"
by Epic Economy
"Energy supply chains are falling apart and the stakes couldn’t be higher. While consumers face soaring utility bills, energy-hungry industries are already in distress and cutting output, and now thousands of businesses are being pushed to the brink of bankruptcy as explosive energy prices eat a larger share of their profits. Experts are warning that a catastrophe is coming this winter as unprecedented energy costs risk causing serious physical and financial damage to families, while triple-digit increases threaten to trigger mass business closures, and result in job losses and higher consumer prices.
If you think the worst of energy-driven inflation is already over, we have some unfortunate news for you. Americans are being increasingly exposed to a far more expensive and volatile natural gas market as geopolitical events continue to escalate on the other side of the globe. Already, more than 20 million American households have fallen behind on their electricity bills – but we haven’t even seen prices peaking just yet.
Right now, natural gas is at 14-year highs, with prices exploding over 500% since the fall of 2020. The gap between demand and supply is pushing grid operators to a breaking point, and conditions are expected to get even more extreme this winter. A new analysis published by Business Insider indicated that heat waves are expected to continue knocking out power across states for days on end. “That endangers millions who can't afford to cool down with a generator or a pool. A lack of power will also lead to widespread food spoilage as freezers and refrigerators shut down,” it noted.
According to data provided by Barclays researchers, utility bills in the U.S. could jump another 40% due to the global energy rally, Bloomberg reported. “These are very high prices and will not be affordable for many households,” emphasized Mark Wolfe, executive director of the National Energy Assistance Directors Association. At the same time, the outlook for businesses is even scarier. A new survey released by the Federation of Small Businesses shows that companies have experienced on average a 424% rise in natural gas costs and a 349% increase in electricity so far this year. But some sectors are being particularly hard hit. Just as it happened during the health crisis, the hospitality sector is being pushed to the edge of a disaster once again. For the owners of the restaurant franchise Tiny Rebel, energy costs alone were up between 600% and 700% this year, CFO Hannah Williams said in a recent interview with CNBC.
Their company may not survive this winter, and thousands of others could face a similar fate. Many hotel owners and people from the food and drinks sector recently started to speak out about the crippling cost increases they are experiencing. For the managing director of the Frisco Group, businesses are facing a “mass extinction event” given that they can’t keep up with skyrocketing prices for everything. “Find a solution to this now or face restaurant closures,” she said during an interview with The Morning Advertiser.
Among those that survive, many will be forced to lay off thousands of workers, the consultancy said. Red Flag is warning that more than 75,000 larger companies that are high energy users are at risk of insolvency or are likely to lay off staff, in the UK. For the U.S., preliminary research shows that at least 50,000 businesses are on the line.
In other words, the energy crisis is reaching unimaginable proportions as we speak. Now, a wave of business bankruptcies and mass lay-offs is emerging on the horizon and families will experience another dark and painful winter as supplies dwindle. So if you can, stock up on batteries, candles, and non-perishables. Blackouts are coming, and even the world’s wealthiest nations won’t be spared."
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