Relief announced by the government earlier today for businesses facing rising energy prices this winter, including pharmacies, has been welcomed but will ‘barely touch the sides’ of the cost crisis they are facing, according to the National Pharmacy Association (NPA).

Through a new energy bill relief scheme, the Government will provide a discount on wholesale gas and electricity prices for all UK businesses whose prices have been significantly inflated, including pharmacies.

Chair of the NPA Andrew Lane said: ‘This government relief for businesses facing rising energy prices is very welcome, but it leaves room for doubt as it is only guaranteed for a few months. It barely touches the sides of the overall cost crisis for pharmacies, which goes well beyond energy bills and requires a more rounded and permanent fix, baked into NHS contractual arrangements.’

The scheme, initially running for six months, will apply to energy usage from 1 October 2022 to 31 March 2023. Pharmacies will not have to apply to the scheme as support will automatically be applied to bills.

Prime Minister Liz Truss said the scheme would ‘protect jobs and livelihoods’ and ‘keep energy bills down’.

To administer support, the government has set a price – expected to be £211 per MWh for electricity and £75 per MWh for gas – discounting the price per unit of gas and electricity and includes the removal of green levies.

The discount for each business will vary depending on their contract type and circumstances.

Pharmacies on existing fixed price contracts will be eligible if the contract was agreed on or after 1 April 2022. Provided it is above the government price, their energy costs will automatically be reduced for the duration of the scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis.

Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price. This maximum discount is likely to be around £405/MWh for electricity and £115/MWh for gas.

Customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may increase. The government said it was working with suppliers to allow customers in England, Scotland and Wales to have the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish.

For businesses on flexible purchase contracts, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the maximum discount.

Equivalent support will also be provided for businesses that use heating oil or alternative fuels instead of gas, further detail on which will be announced. A parallel scheme will be established in Northern Ireland.

Earlier this month, the Pharmaceutical Services Negotiating Committee (PSNC) called on the government to provide urgent financial support to community pharmacies to help with rising utility bills.