Ministers are considering lifting the ceiling on energy prices to stop the price spike that is pushing gas companies to the wall, a cabinet minister has revealed.
Alok Sharma acknowledged that the move – which would push up household bills – is “under discussion” in response to the supply crisis that also threatens shortages of frozen foods.
When asked if the cap would be removed “if gas prices continued to rise”, Mr Sharma replied: “Let’s see where we are. I know the business secretary is going to have these very detailed discussions.
Soaring natural gas prices have pushed seven energy providers out of business this year – and there are fears that four more will go bankrupt very soon.
Prices have jumped more than 70% in August alone and households could already see their bills soar to £ 400 in a year, according to some estimates.
A lack of carbon dioxide is expected to worsen existing food shortages, as meat producers use it for slaughtering animals and in packaging.
Kwasi Kwarteng, the business secretary, will meet with regulator Ofgem today and meet with industry leaders tomorrow, to find ways to keep the industry afloat and prevent fuel poverty.
However, it was not clear whether Mr Sharma meant the government was considering removing the cap on energy prices – or the “green” surcharge on household bills.
Confusedly, the minister also sought to reassure people, telling the BBC Andrew Marr Show: “We have the energy price cap, we have the hot house discount to protect people at this particular time.”
And he sought to allay fears of an energy crisis, saying: “We don’t see any supply risk at this time and prices are protected.”
Pat McFadden, a shadow Labor Treasury minister, accused ministers of failing to anticipate the crisis and leaving the UK exposed to “a spike in international prices”.
“In the short term, what the business secretary must do is ensure the continuity of supply, it is a fundamental duty of the government both for domestic consumers and for businesses,” he said. he told Sky News. Trevor Phillips Sunday program.
He added: “In the long run, what this has shown is the need to continue the transition to net-zero and the vulnerability of dependence on fossil fuel markets, especially markets. international. “
Ofgem has already raised the price cap from an average of £ 1,138 per year to £ 1,277 from next month, for someone on a standard variable rate.
The next official review will take place in April, when it could exceed £ 1,500, according to price comparison website The Energy Shop.
The UK relies on gas-fired power plants to produce almost half of its electricity – and low wind speeds have also affected renewable energy production,
Fertilizer factories in Teesside and Cheshire have closed and Ranjit Singh Boparan, the owner of Bernard Matthews and 2 Sisters Food Group, said the supply of turkeys at Christmas could not be guaranteed.
“The CO2 problem is a huge blow to the body and puts us at breaking point, it really is – it’s poultry, beef, pork, as well as the food industry at large,” he said on Saturday.