Budapest Post

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

UK Gov't Stands Firm on Household Price Cap Amid Energy Market Jitters

UK Gov't Stands Firm on Household Price Cap Amid Energy Market Jitters

Rampant speculation on the energy market has seen the price of natural gas futures more than double in recent weeks — before crashing back after Russia pledged to honour all existing contracts via its network of pipelines. But entrepreneurs in Britain's oversaturated market fear their profit margins will be cut to the bone.

The UK's business minister has insisted the household energy price cap will remain in place despite yo-yoing energy market prices and pressure from industry.

Business, Energy, and Industrial Strategy Secretary Kwasi Kwarteng told Sky News' Trevor Phillips on Sunday morning that the current price control limit, set by regulator Ofgem in August, would stay in force for the full six-month term from 1 October of this year to 1 April 2022.

"Many companies during this period have said that we should lift the price cap or get rid of it", Kwarteng said. "And I've been very clear that it can't be moved because it does offer consumers the protection that we all need against very, very high upswings in the price".


The cabinet minister also resisted Phillips' goading suggestion that the government was advising the public to wrap up warm and turn the thermostat down.

"I'm not going down that route. I think people are perfectly sensible users of energy", Kwarteng said. "All I am guaranteeing, or attempting to guarantee, is security of supply".


Kwarteng explained that 50 percent of the UK's gas supply in 2020 was domestically-produced, 30 percent came from Norway — whose energy minister told him a fortnight earlier the country was increasing gas output — and 20 percent from liquified natural gas (LNG) imports from around the world.

Phillips is a former member of the London Assembly for the opposition Labour Party, and was on the board of the Britain Stronger in Europe campaign against Brexit — which Tory Prime Minister Boris Johnson delivered.

Business Concerns


Kwarteng also stressed that while the price cap would not be extended to business users, they've already benefited from existing subsidies.

"We've already got subsidies in place and it's very clear that a lot of those are working", he said. "On the consumer side we've got an energy price cap and on the industry side we have measures where we support industries, heavy electricity users".


"I'm speaking to government colleagues, particularly in the Treasury, to try and see a way through this", Kwarteng added.

But an unnamed source at the Treasury denied the business secretary had approached the department.

"This is not the first time the BEIS secretary has made things up in interviews", the source told Sky News. "To be crystal clear the Treasury are not involved in any talks".


Industry group Energy UK chief executive Emma Pinchbeck warned that more "fragile" intermediary household supply companies could go bankrupt over the winter — and claimed that would mean price rises for consumers.


Britain's privatised energy market has scores of companies competing to act as intermediaries between the generating and supply monopolies and consumers, reading meters and billing users.

The actual supply infrastructure is run by regional Distribution Network Operator (DNO) organisations, currently controlled by just seven companies, while generation is in the hands of other firms — including the French state-owned national power utility EDF.

Market Mayhem


Prices on the gas futures market have more than doubled in recent weeks — amid speculation following unusually cold winter and spring weather across Europe earlier this year and a recent period of calm winds that hit electricity turbine generation — causing severl energy billing companies to go bankrupt.

But Russian President Vladimir Putin's announcement on Wednesday that national gas company Gazprom would honour all supply contracts burst the market bubble — with the pending start of operations from the new Nord Stream 2 pipeline across the Baltic Sea set to increase flow further.

Ironically, the prime minister and his Downing Street spokesman made statements this week claiming Nord Stream 2 would actually harm "energy security" by making Eastern European countries more reliant on Russia.

A total of 10 smaller billing firms have gone bust since August as speculation on the gas futures market has seen wholesale prices double in weeks. The largest of those was Avro Energy, which had 580,000 customers before filing for insolvency in September.

Opposition Response


Labour Shadow Energy Minister Jonathan Reynolds took the opportunity to lay into the ruling Conservatives, insisting the crisis was "directly down to government policy". But he said his party would not nationalise the sector if it were in government, claiming to even suggest so would be "a distraction from the poor government choices that have been made".



Liberal Democrat leader Sir Ed Davey called for the energy bill discount to elderly to be tripled.


 


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
×