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
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
×