UK pledges to deal with fallout from soaring gas prices

LONDON, Sept. 18 (Reuters) – Britain said on Saturday it would work with the energy industry to try to stem the fallout from soaring gas prices after fears grew that more energy suppliers and food producers would find it difficult to operate with such high costs.

Business Minister Kwasi Kwarteng said he was reassured that the security of gas supply was not an immediate cause for concern, but that he would work with suppliers to “manage the wider implications of the global increase in gas prices “.

Kwarteng had emergency talks with executives from National Grid (NG.L), Centrica (CNA.L), EDF (EDF.PA) and regulator Ofgem on Saturday and is expected to have further discussions with industry figures Sunday and Monday.

A rise in gas prices has already forced several domestic energy suppliers into bankruptcy and closed fertilizer factories that also produce carbon dioxide, used to stun animals before slaughter and extend the shelf life of food. Read more

Consumer groups and opposition politicians have warned that some customers and businesses will struggle to pay higher bills. The BBC reported that at least four small UK energy companies are expected to go bankrupt next week.

The business department said the pressures businesses face were discussed at the meeting. Kwarteng said no customer would go without gas or electricity because an alternative supplier would be found in the event of bankruptcy.

“Protecting customers during times of rising global gas prices is a top priority,” he said on Twitter.

RENEWABLE

The government was prompted to act after low levels of gas storage, dwindling supplies from Russia, demand from Asia, low production of renewable energy and nuclear maintenance outages combined with over European gas prices tripled this year, reaching record levels. Read more

The impact was immediately felt in the UK food industry where the shortage of CO2, also used in beer, cider and soft drinks, exacerbated an acute shortage of truck drivers, which was blamed on the impact of COVID-19 and Brexit.

Nick Allen of the British Meat Processors Association said on Saturday the pork industry was two weeks away from reaching tampons, while the British Poultry Council said its members were on a razor’s edge as suppliers could not guarantee deliveries that up to 24 hours. in advance.

“Doing nothing is not an option,” Allen told Reuters, adding that given the exceptional circumstances, the government would either have to subsidize the power supply to maintain fertilizer production or source CO2. elsewhere.

Richard Walker, managing director of Iceland Foods, said a CO2 shortage would affect meat products, air-packed products such as cheese and salads, and long-lived baked goods.

“We have to sort it out, quickly,” he said.

Dermot Nolan, former Ofgem chief, told the BBC he expected prices to stay high for up to four months and it was not clear what the government could do to affect market rate – meaning they will remain a focal point ahead of the COP26 climate conference in Scotland in November, where governments will seek to agree on new rules to cut emissions.

Reporting by Kate Holton; Editing by Edmund Blair, David Holmes and Gareth Jones

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