Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Ministers preparing for 'worst-case scenario' of persistently high gas costs beyond 'short spike'

Ministers preparing for 'worst-case scenario' of persistently high gas costs beyond 'short spike'

Speaking to Kay Burley on Sky News, business minister Paul Scully says high wholesale gas costs are placing "pressure" on the energy price cap.

The government is preparing for the "worst-case scenario" of gas costs continuing to stay high beyond a "short spike", a minister has told Sky News, as Labour said the government has been "far too complacent" about the crisis.

Speaking to Kay Burley, Paul Scully said high wholesale gas costs were placing "pressure" on the energy price cap.

Asked what the worst-case scenario was for a rise in the level of the cap, the business minister replied: "This is all part of the conversations that Ofgem will set that cap at, because supply prices are based on a number of factors.

"Clearly, as a government, we need to make sure we are planning for the worst-case scenario because we want to make sure we can protect consumers."

Pushed on what a worst-case scenario could entail, Mr Scully said: "That it goes on for longer than a short spike. I can't give you a figure now."

Two suppliers have also taken steps to deter new customers from joining.

Bulb has scrapped its popular refer a friend scheme, while Ovo has changed its website to remove a function that allowed customers to "get an energy quote in under two minutes".

Meanwhile, Labour's shadow business secretary Ed Miliband said recent events are "far from normal", with "8,000 customers losing their suppliers yesterday alone, 1.5 million in the last six weeks".

He told MPs: "We are seven days from the cut to Universal Credit. This is the last time a government minister will be in the House to explain to millions of families why it is plunging them further into fuel poverty.

"Instead of warm words or platitudes, can he now tell the British people how he can possibly justify this attack on their living standards?"

Responding to Labour's urgent question in the Commons, Business Secretary Kwasi Kwarteng said: "The solution to this crisis will be found from the industry and the market, as is already happening, and the government - I repeat - will not be bailing out failed energy companies."

Mr Scully's comments are in contrast to remarks from Boris Johnson to Sky News earlier this week.

The prime minister told Sky News political editor Beth Rigby that Britain's energy crisis was a "short-term problem".

Soaring global gas prices have thrown the industry into crisis, with six firms folding this month: PfP Energy, MoneyPlus Energy, Utility Point, People's Energy, Green and Avro Energy.

There are fears that more could follow, with Bulb and Igloo reportedly on the brink of collapse.

There are now roughly 40 suppliers in the UK market, sharply down from a peak of 70 in 2018.

The chief executive of Ofgem has warned that rising gas prices may not be temporary and more supplies could go out of business in the coming months.

Jonathan Brearley told MPs that "well above" hundreds of thousands of customers could be affected.

The energy price cap is set to rise from next Friday to £1,227, a record level.

Wholesale prices for gas have increased 250% since the start of the year, and there has been a 70% rise since August.

Consumers are protected from sudden price hikes by the price cap, but this puts pressure on suppliers as they cannot pass on the increase in wholesale gas prices to customers.

The rise has been put down to a number of factors, including a cold winter leaving stocks depleted, high demand for liquefied natural gas from Asia and a drop in supplies from Russia.

The energy crisis is having a knock-on effect in other areas, with rising gas prices affecting carbon dioxide production.

Ministers have struck a deal with American company CF Industries, which produces around 60% of the UK's CO2 supply, to provide "limited financial support" towards the firm's running costs for three weeks to help it restart production.

The closure of its two sites last week had prompted fears that shoppers could start noticing shortages in poultry, pork and bakery products within days.

CO2 is injected into the packaging of perishable foods such as meat and salads to inhibit the growth of bacteria, typically prolonging the shelf life of products such as beef steak by around five days.

The gas is also used to stun animals prior to slaughter, and is deployed as a coolant for medicines and vaccines in the NHS, and likewise in nuclear programmes.

A director at a second major carbon dioxide producer has has said it could back online within days

Teesside-based company Ensus' biofuels plant has the potential to supply around 40% of the UK's demand for CO2 but it has been on an annual shutdown as part of routine maintenance.

Grant Pearson said the shutdown had been planned six months ago and the switch-on next week remains on schedule.

Speaking to Sky News, Iceland's managing director said the UK has to become less reliant on gas by using a "broader energy mix" to prevent shortages.

Richard Walker said: "I think we've now got to think longer-term. This loan is only three weeks: what happens after that, or what happens the next time the gas prices spike?"

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×