Britain jittery over rising cost of gas

The UK government on Monday held an emergency meeting with energy and consumer groups, as the country experienced galloping gas prices that threaten huge bills for households as well as undermining food supplies and casting doubt on energy firms’ futures.

Prime Minister Boris Johnson sought to reassure consumers fearing surging winter power bills and the possibility of more small British energy firms collapsing from higher costs.

Faced with a fast-moving situation, Business Secretary Kwasi Kwarteng met with the energy industry and consumer groups.

Speaking during a visit to the United States, Johnson said “people should be reassured in the sense that yes there are a lot of short-term problems not just in our country… but around the world caused by gas supplies and shortages of all kinds”.

“We’ve got to try and fix it as fast as we can, make sure we have the supplies we want, make sure we don’t allow the companies we rely on to go under. We’ll have to do everything we can,” British media reported him as saying.

Prices of natural gas in Britain have hit record highs, also driven up after a fire knocked out a vital point connecting the country’s power grid to France.

Wholesale prices for gas have rocketed 70 per cent since August, adding to already strong inflation that has been stoked by staff shortages as economies reopen after pandemic lockdowns.

Market prices have soared by 203 per cent since January.

Many small energy providers have emerged in the UK market over recent years, grabbing large amounts of customers from established players such as British Gas.

But on Monday, Peter McGirr, Chief Executive of small energy firm Green, said “the outlook is looking bleak”.

“We just don’t have as deep pockets to keep going through this crisis. I think that all suppliers are feeling the pinch of this but some of them just have a lot deeper pockets to try and ride out the storm.”

McGirr called for government support or “it’s unlikely we will see the winter through”.

A lack of atmospheric wind for turbine sites, coupled with ongoing nuclear outages and the winding down of coal mines by climate-conscious governments, has left parts of Europe grappling with an energy crisis.

Russia says its newly completed Nord Stream 2 gas pipeline to Germany will alleviate any winter shortages.

But the US government and EU ally Ukraine are deeply opposed to the Kremlin-backed project.

Downing Street insisted that Britain was not dependent on Russian gas supplies.

“We meet half of our annual supply through domestic production and the vast majority of imports come from supplies such as Norway,” a spokesman said.

Owing to the price hikes, Britain is grappling also with a shortage of carbon dioxide (CO2) gas, triggering warnings of further pressure on food supplies, which are already hit by a shortage of lorry drivers.

Fertiliser production at two UK plants providing up to 60 percent of Britain’s CO2 output has been halted since last week.

“With fewer than 100 days to go until Christmas, and already facing mounting labour shortages, the last thing British poultry production needs is more pressure,” British Poultry Council chief executive Richard Griffiths said in a statement Friday.

Carbon dioxide is used in the humane slaughter of animals.

“If vital sectors like the poultry meat industry face CO2 shortages that compromise their performance, it will very quickly become an issue of national security. We hope this can be avoided through swift government action,” Griffiths added.