Kwasi Kwarteng says gas prices are ‘global issue’

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The fact-checking website has Full Fact has shut down attempts to blame the UK’s gas crisis squarely on Brexit. To date, nine energy suppliers have gone bust as a result of surging gas prices, forcing more than 1.7 million customers to switch energy providers. On Wednesday, the regulator Ofgem confirmed Enstroga, Symbio and Igloo were the three latest small energy suppliers to go under.

The deepening crisis has led to scores of people claiming online the crisis was triggered by the UK leaving the Internal Energy Market (IEM).

In one instance cited by Full Fact, the Remainer Twitter account UK is with EU accused the BBC of failing to address Brexit’s link to the crisis.

The account tweeted: “BBC News at 10: ‘The root of this problem is a huge increase in wholesale gas prices.’

“They forget to mention that prices increased as a result of Brexit, and the UK is no longer in the EU’s internal energy market, which has kept prices in the EU low as prices in the UK soar.”

The tweet, which was sent out on September 19, was liked more than 1,700 times and was retweeted by 770 people.

But the claim has been disputed by Full Fact’s experts, who have argued “there is no evidence that leaving the EU was a major reason behind price increases felt in the UK”.

The UK was a member of the IEM right up until the end of the Brexit transition period on December 31 2020.

The IEM allows for the free movement of gas and electricity around the economic bloc, without imposing restrictions or tariffs across EU border.

Gas prices: Putin ‘going to keep squeezing’ says expert

According to Tom Edwards, a Senior Modelling Consultant at Cornwall Insight, UK’s withdrawal from the EU and IEM was “unlikely to be a significant factor” in the rising prices of wholesale gas and energy.

As part of the EU, the UK had access to so-called implicit allocation, where member states have access to both energy and interconnector cable capacity at the same time.

Outside of the EU, the UK has to rely on explicit allocation where energy and interconnector cable capacity are bought separately.

According to the fact-checkers, this can lead to less efficient trade and increased prices.

Mr Edwards said: “Great Britain is constrained in how much it can import from the EU.

“So, more fundamental factors such as proximity to continental gas markets, storage levels, wind speeds, and interconnector availability (which would have been the same with or without the UK leaving the EU) are the most significant drivers of difference between prices.

“As well as this, gas prices in European markets are similarly high.

“The high prices are generally driven by international (and some regional) factors.”

Brexit’s supposed link to the gas crisis has also been disputed by Oil & Gas UK (OGUK).

In a statement published on Monday, the group said wholesale prices of gas have surged 250 percent since January, and 70 percent since August alone.

However, OGUK claimed the causes of the UK crisis are global and caused by low European stocks, dwindling supplies from Russia and strong demand for natural gas in Asia.

Will Webster, OGUK Energy Policy Manager, said: “This price surge shows how we continue to need UK gas.

“Letting production fall faster than we can reduce demand risks leaving us increasingly dependent on other countries, and at the mercy of global events over which we have no control.

“While the UK continues to use oil and gas, we should make the most of the resources in our control while working for a low-carbon future.”

Source: Read Full Article