Energy bills to soar and meat industry ‘in crisis’ due to global gas shortages
Britain looks set to feel the impact of a global energy crisis which could hit household bills and reduce the amount of meat products on supermarket shelves.
Wholesale gas prices have soared in recent weeks, leading to warnings the country is facing higher costs for the rest of the year.
Ministers have denied the UK is facing ‘supply emergencies this winter’ but a former head of the energy regulator says prices will remain high.
The rise is being blamed on high global demand, maintenance issues and lower solar and wind energy output.
At the same time, a worldwide carbon dioxide shortage has triggered warnings from the meat industry that it could ‘grind to a halt’ within a fortnight.
Business secretary Kwasi Kwarteng said energy security is ‘an absolute priority’ as he prepared to hold talks to prevent customers facing big price hikes.
Dermot Nolan, a former Ofgem chief executive, said the increases were the result of depleted stocks following a cold winter last winter, reduced supply from Russia, and increased demand for liquefied natural gas from Asia.
He told the BBC Radio 4 Today programme: ‘It is not obvious to me what can be done in the very short run. Britain does have secure relatively diverse sources of gas, so I think the lights will stay on.
‘But I am afraid it is likely in my view that high gas and high electricity prices will be sustained for the next three to four months.
‘It is very difficult to see what the government can do directly in this regard.’
Mr Kwarteng tweeted: ‘Britain has a diverse range of gas supply sources, with sufficient capacity to more than meet demand. We do not expect supply emergencies this winter.’
The energy secretary has reportedly held meetings with senior executives from a range of power companies.
Meanwhile, the government is being urged by meat producers to step in to protect the food supply chain, after the sharp rise in gas prices resulted in a cut in the supply of carbon dioxide (CO2) to the industry.
Two large fertiliser plants in Teesside and Cheshire, which produce CO2 as a by-product, have shut as a result of the sudden hike in wholesale gas prices.
British Meat Processors Association chief executive Nick Allen said CO2 is essential to both the humane slaughter of livestock and extending the shelf-life of products.
He told the BBC Radio 4 Today programme: ‘If we haven’t got the CO2 supplies, on the packaging side that reduces the shelf-life of products going on the shelves at a time when we are really struggling because of all the transport problems.
‘This has come as a huge shock, it has happened so quickly.
‘I think everyone is outraged in the industry that these fertiliser plants can shut down without any warning whatsoever and suddenly take something which is so essential to the food supply chain off-stream just like that.
‘We really need government to step in now and actually do something.’
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