The Government is holding urgent talks with representatives from the energy industry due to growing concern about a spike in the wholesale price of gas.
High global demand, maintenance issues at some gas sites, and lower solar and wind output are all being blamed for the rise.
At a glance: 5 key points
- Business Secretary Kwasi Kwarteng is talking to gas suppliers and others this weekend to hear how wide-reaching the impact of surging prices could be
- He is talking to chief executives from gas producers, the National Grid, suppliers including Scottish Power, EON and EDF and the regulator Ofgem
- The high prices have already caused two large UK fertiliser plants to close
- Government sources have said there is no threat to UK gas supplies and the impacts on small energy companies are being monitored
- Natural gas prices are at record highs as economies around the world begin to recover from the Covid-19 pandemic
What’s been said
Dermot Nolan, director at Fingleton Strategic Consultancy and former chief executive of Ofgem, told BBC Radio 4’s Today programme gas prices have increased not just in the Uk, but all over the world.
He said that Germany and Spain are “experiencing similar types of increases".
He added that "high gas and high electricity prices will be sustained for the next three to four months" and that it was difficult to see what the Government could do about it.
Lower winds in the UK has meant less renewable energy is generated.
There have also been outages at some nuclear stations and lower flows into the UK of natural gas from Norway, which has pushed up the price of natural gas.
CF Industries Holdings also closed two of its plants in Billingham in Stockton-on-Tees and Ince in Cheshire on Thursday. Both of these plants are estimated to account for up to 60% of the UK’s CO2 supplies.
The firm said it was halting production due to the rising prices of natural gas. There was no indication as to when the plants may resume production.
The UK is expected to see a shortage of CO2 gas impact supplies of beer, fizzy drinks and meat, according to reports.
The Department for Environment, Food and Rural Affairs (Defra) was warned on Thursday (16 September) of the shortages caused by two major fertiliser plants closing this week.
Supermarkets and restaurants are expected to be affected due to gas being instrumental in the production of carbonated drinks and meat processing.
The drinks industry relies on CO2 to carbonate beverages and the meat industry uses gas throughout processing.