UK premier vows to protect firms as gas prices surge
BUSINESS SECRETARY KWASI KWARTENG SAYS CONSUMERS WOULD BE PROTECTED FROM SUDDEN PRICE HIKES THROUGH THE GOVERNMENT’S ENERGY PRICE CAP
NEW YORK: British Prime Minister Boris Johnson said, ‘‘We’ll have to do everything we can” to prevent energy companies going under as wholesale gas prices surge in Britain.
OGUK, representing the offshore oil and gas industry, reported wholesale prices for gas have surged 250 per cent since January with a 70 per cent rise since August alone.
The rise in gas prices has been blamed on a number of factors, including a cold winter which left stocks depleted, high demand for liquefied natural gas from Asia and a reduction in supplies from Russia.
Speaking to broadcasters on the tarmac of New York’s JFK airport, Johnson said: “I think people should be reassured in the sense that yes there are a lot of short-term problems not just in our country, the UK, but around the world caused by gas supplies and shortages of all kinds.
“This is really a function of the world economy waking up after Covid.
“We’ve got to try and fix it as fast as we can, make sure we have the supplies we want, make sure we don’t allow the companies we rely onto go under. We’ll have to do everything we can.
“But this will get better as the market starts to sort itself out, as the world economy gets back on its feet.”
It comes with Business Secretary Kwasi Kwarteng due to hold a fresh round of crisis talks with the energy industry.
Following a meeting on Sunday with the regulator Ofgem, Kwarteng said, “Well-rehearsed plans” were in place to ensure consumers were not cutoff in the event of further failures.
However, he is expected on Monday to come under pressure from the big suppliers for a major government support package to help them through the crisis.
The Financial Times reported the industry wants the creation of a so-called “bad bank” to absorb unprofitable customers from firms that fail.
Meanwhile, Johnson sought to reassure consumers the price increases were only “temporary” as the world economy picked up after the Covid pandemic.
“It’s like everybody going back to put the kettle on at the end of a TV programme, you’re seeing huge stresses on the world supply systems’’, he told reporters travelling with him to the United Nations General Assembly in New York.
Following a weekend locked in emergency talks, Kwarteng acknowledged it was a “worrying time” for customers, but said he was confident supplies could be maintained.
He said consumers would be protected from sudden price hikes through the government’s energy price cap.