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Sunday, October 24, 2021

Gas prices: MPs pressure government on fuel costs for industry


The government is under increasing pressure to support parts of the economy struggling with rising gas bills, as several Conservative MPs have joined industry figures calling for ministers to take action.

On Friday, Business Secretary Kwasi Kwarteng met with heavy industry leaders, but no solutions were found.

The government has been accused by Labour of being in denial about the crisis.

Since January, gas prices have increased by 250 percent, significantly raising costs.

A government source said, when asked if a price cap for industry was being considered, “We’re working with industry on their suggestions.”

Conservative MP for North West Leicestershire Andrew Bridgen said he would support government intervention to assist energy-intensive industries in the short term.

“What we need, however, is a long-term energy policy based on diverse sources of supply,” he said.

Conservative MP Miriam Cates described rising energy prices as “acute.”

She urged the government to act and consider all options to safeguard the steel industry, which she described as facing “serious threats.”

“In the long run, it’s critical that the government sees steel as an industry… critical to our future – we can’t meet our infrastructure commitments or achieve net-zero without steel,” she said.

Jo Gideon, Conservative MP for Stoke-on-Trent Central, stated that “potters, brickmakers, and materials scientists” required government assistance in order to decarbonize while remaining competitive.

Her comments came as a trade body warned ceramics businesses may be forced to scale back or stop production due to the rise in gas prices.

‘We need action now’

Following meetings with Mr Kwarteng on Friday, UK Steel CEO Gareth Stace stated that the government had failed to find solutions to the country’s soaring energy prices.

“We can’t wait until Christmas and the holidays after that. Or even a couple of weeks. We need action now, and it must be swift and decisive “Mr. Stace stated.

Mr Kwarteng, he said, had listened but offered “no immediate solutions or guarantees.”

The director general of UK Steel said he was “baffled” because governments in the rest of Europe had stepped in to support industry, despite the fact that they faced lower energy costs than the UK.

Representatives from energy-intensive industries such as paper, glass, cement, lime, ceramics, chemicals, and steel met with the business secretary on Friday.

Following the meeting, Richard Leese, chair of the Energy Intensive Users Group (EIUG), stated that the government had taken “positive first steps to develop practical solutions.”

Since the beginning of the year, the wholesale price of natural gas has skyrocketed. Furthermore, the UK has less gas stored than other European countries, which may help to cushion price volatility.

Domestic customers’ bills are protected from these sharp increases in part by a price cap managed by the regulator Ofgem, which limits how far and how quickly bills can rise.

Nonetheless, the impact on UK households has been felt since the price cap was raised at the beginning of October.

Customers will face additional “significant increases” in the spring, according to Ofgem.

The cap is revised twice a year, with the next change scheduled for April.

This month, it applies to households in England, Scotland, and Wales.

Households in Northern Ireland have also seen a recent sharp increase in their bills, but they are not protected by the Great Britain energy price cap.

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