We have been a large producer of gas since the 1960s. Output, however, has fallen since 2000, despite demand continuing to rise. The UK imports over 50% of gas. A lot of this comes from Norway, Netherlands and Belgium. Russia supplies less than 5% of the UK’s gas.
Due to our lack of home-produced gas, thanks to the lack of storage facilities, we need to buy gas in large quantities on the wholesale market. The wholesale gas market has been subject to price increases recently. This has caused a spike in prices, which is having a devastating impact on the price of gas and general affordability.
Pipeline gas and liquid natural gas imports 2020:
The Perfect Storm:
A perfect storm has been brewing for a while. Last winter was cold in many places around the globe. This depleted the amount of available gas. The reserves are usually replenished over the summer. However, production dropped because many nations were catching up with maintenance, which was postponed due to lockdowns. To make things worse, calm weather reduced the amount of electricity produced by wind power. The result of this is that gas wholesale prices have more than quadrupled over the last year.
The UK has been so badly hit as around 85% of our homes use natural gas as their main central heating source. October’s increase in the fuel cap (the maximum customers will be charged for gas) means price increases are going to happen. Most large domestic suppliers buy their gas in advance, known as hedging, so they have yet to pass on the price increase to their customers. However, the fuel cap is likely to rise again in April. Wholesale gas prices are unlikely to drop until storage facilities fill up again, which is not likely until the spring.
What can you do?
If you’re struggling with increasing gas prices there is help at hand. In the first instance, you could contact Citizens Advice they have a huge amount of information available. They offer suggestions such as;
Save Money – Quick Wins:
While we can say invest in low energy usage appliances or have your home triple glazed, these things cost money. So while these are important points for the future, for the here and now, if you’re struggling – like a lot of people are, here are some quick points to help you now;