Salem Radio Network News Thursday, October 28, 2021

Business

UK business minister meets energy bosses over soaring gas prices

By Kate Holton

LONDON (Reuters) -Britain’s business minister held emergency talks with the heads of the UK’s largest energy suppliers and operators on Saturday to discuss a surge in gas prices that threatens a range of industries including suppliers of meat and poultry.

The jump in prices has already forced several domestic energy suppliers out of business and has shut fertiliser plants that also produce carbon dioxide, used to stun animals before slaughter and prolong the shelf-life of meat.

Business minister Kwasi Kwarteng met executives from National Grid, Centrica, EDF and regulator Ofgem to discuss the issue and said he was confident there was enough capacity to more than meet demand.

“Energy security is an absolute priority,” Kwarteng said on Twitter. “We are working closely with Ofgem and gas operators to monitor supply and demand.”

The government has been moved to act after low gas storage levels, decreased supplies from Russia, demand from Asia, low renewables output and nuclear maintenance outages combined to send European gas prices to record highs after more than tripling this year.

Dermot Nolan, former head of Ofgem, 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 rates – meaning they will remain a focal point in the run up to the COP26 climate conference in Scotland in November, where governments will seek to agree new rules to suppress emissions.

Nolan added that a diverse supply of energy would help keep the lights on.

The issue is also particularly important since retailers and food manufacturers normally start preparing for Christmas, their busiest time of the year, in September.

HIGHER BILLS

Consumer groups and opposition politicians have warned that some customers and businesses will struggle to pay higher bills, while the food industry warned that consumers could see a shortage of British chicken and pork on shop shelves before too long.

The shortage of CO2, which is also used to put the fizz into beer, cider and soft drinks, comes when the food industry is already struggling with an acute shortage of truck drivers, which has been blamed on the impact of COVID-19 and Brexit.

The government has said it is in regular contact with food and farming organisations. It is also liaising with the Civil Contingencies Secretariat that helps respond to civil emergencies.

Nick Allen of the British Meat Processors Association said on Saturday that the pig sector was two weeks away from hitting the buffers, while the British Poultry Council said its members were on a “knife-edge” as suppliers could only guarantee deliveries up to 24-hours in advance.

“Doing nothing is not an option,” Allen told Reuters, adding that given the exceptional circumstances, the government needed to either subsidise the power supply to maintain fertiliser production or source CO2 from elsewhere.

Were slaughterhouses to run out of CO2, pigs and chickens would be left on farms, creating additional animal welfare, food supply and food waste issues. “We hope this can be avoided through swift government action,” British Poultry Council head Richard Griffiths said.

(Reporting by Kate Holton; Editing by Edmund Blair and David Holmes)

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