Payment Culture in the UK Energy, Oil & Gas Sector
Small businesses supplying the energy, oil, and gas sector in the UK are facing significant challenges in 2023. The sector has experienced tremendous volatility in recent years due to shifting global energy markets, changes in government policies, and increasing pressure to address climate change. These factors have created significant headwinds for small businesses that supply products and services to the industry.
One of the most significant challenges for small businesses in this sector is the highly competitive nature of the industry. Large, well-established firms often dominate the market, making it difficult for smaller businesses to gain a foothold. Many small businesses struggle to compete on price, quality, and scale, which can limit their ability to win contracts and secure new business.
Another major challenge is the rapidly changing regulatory landscape. In recent years, there has been a growing emphasis on reducing carbon emissions and transitioning to renewable energy sources. This shift has created new opportunities for small businesses that specialize in renewable energy technologies but has also made it more difficult for businesses that rely on traditional fossil fuel industries.
Small businesses must stay up to date with the latest regulatory developments to ensure they are compliant and able to adapt their business models accordingly.
Looking at payment culture in the Energy, Oil & Gas sector last year versus this year, there continues to be a big difference between the slowest and fastest payers, and some of the large companies have clearly made efforts to improve their payment terms.
In particular, Drax Hydro Ltd has moved from average payment time of 115 days last year to 64 days this year but still is amongst the slowest in the sector. On the fast payer list, Inner Dowsing Wind Farm should be congratulated for moving from the slow-payer list last year (paying in 64 days) to the fastest list this year paying in just 8 days.