UK wholesale gas prices reaching record highs
6th October 2021 16:20
by Jemma Jackson from interactive investor
interactive investor comments on the energy crisis.
UK wholesale gas prices have surged to new record highs today, piling more pressure on energy users and providers.
Commenting, Victoria Scholar, Head of Investment, interactive investor, says: “UK’s wholesale natural gas prices have hit fresh record-highs, rallying nearly 40% in today’s session alone to over 400 pence per therm, with prices rising by more than 100% over the last month.
“European natural gas prices are also surging over 20% also at a record high. Britain has been hit hardest by the crisis with around 40% of its energy coming from gas. There is a major imbalance in the market with some describing this as the global financial crisis for commodities. The shortage of gas has been driven by a resurgence in demand post-Covid, particularly from Asia.
“This is outstripping supply, which has suffered from a series of small disruptions that have hit aggregate output. Expectations for a cold winter ahead, low investment in substitute fossil fuels and unusually low levels of wind to power renewables turbines are all adding to the pressure.”
On the impact on UK consumers, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The energy crisis is heating up as UK wholesale gas prices surge to record highs. Energy providers are dropping like flies as the sector continues to battle an unprecedented rise in the cost of wholesale gas, with prices rising well above levels many suppliers could pass on to customers.
“The harsh reality is scores of customers of failed energy firms will be moved automatically on to new, and invariably more expensive, tariffs.
“More broadly, the prospect of higher energy bills is a huge worry for people on the financial cliff edge, and with the £20 uplift to Universal Credit and Working Tax credits coming to an end, the nation’s most vulnerable face the dilemma of choosing between heating or eating this winter.
“It is worth paying closer attention to your financial well-being and taking some time to plan ahead to help fortify your finances as a winter of discontent looms.
“This could translate to doing an emergency budget, squirrelling away more money into a rainy-day fund – if you have the means to do so - or reducing ‘nice to have but not essential’ expenditure – if squeezed finances haven’t curbed that already.”
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