High gas prices will continue throughout winter in Britain and industry could be forced to close if supplies run out, industrialist Sir Jim Ratcliffe has warned.
The founder of manufacturing giant Ineos said a lack of gas storage in the UK has led to a vulnerability – with the country having just ten days’ worth in the bank.
Billionaire Sir Jim, 68, added that a sharp winter could lead to a widespread shutdown as demand from business and consumers outweighs supply.
It comes as two more energy firms collapsed yesterday amid soaring gas and electricity prices that threaten to add hundreds of pounds to annual bills.
Sir Jim Ratcliffe, the founder of manufacturing giant Ineos, said a lack of gas storage in the UK has led to a vulnerability – with the country having just ten days’ worth in the bank
Appearing on ITV’s Peston, Sir Jim was asked if the country could shut down due to a prolonged cold spell, he replied: ‘Yeah, in which case then, what you would do is you’d shut down industry.
‘I think it’s quite difficult to predict how long this sort of current situation’s going to last, but you know I suppose if you were a betting man you’d assume it would probably run through at least through the winter because obviously our gas demand increases in the winter.’
He added gas was ‘a very strategic and important requirement for the UK economy and they (the Government) need to ensure that the UK economy can’t be held to ransom because we haven’t organised our gas situation very well’.
The UK has ten days’ of storage, Sir Jim said, labelling that figure ‘a bit pathetic really for a nation as important as the UK’ and added that countries on the continent have four or five times that amount.
He said: ‘Four years ago when we had the, if you remember, the ‘Beast From The East’, we were within a day or two of running out of gas in the UK.
‘If we had run out of gas it would have been a disaster for, you know, the older people who wouldn’t have been able to get heating in the house, for industry which would have had to shut down. But we were within days, and we did make that point.’
Manufacturers, such as steel and chemical makers, have previously warned they may have to shut down plants for periods this winter if energy levels continue to be high.
Labour leader Sir Keir Starmer said his party wanted the Government to ‘come out of hiding’ and work with business on the issue.
The price of natural gas on the UK market has rocketed in recent weeks and remains high
He said: ‘They’ve put their out-of-office on. Whilst other countries step up and act, the UK is staggeringly complacently sitting back.’
The Department for Business, Energy and Industrial Strategy said ministers and officials were engaging with industry ‘to further understand and to help mitigate the impacts of high global gas prices’.
Yesterday, two more energy firms collapsed amid rising gas and electricity prices.
Pure Planet, which has 235,000 customers, and Colorado Energy, which has 15,000, have now triggered a rescue regime operated by regulator Ofgem.
Customers will still receive energy services, but face being moved to a new supplier and tariff that is likely to cost around £400 extra a year. It comes after nine suppliers folded last month.
A disused gas holder in London is pictured. Two more energy firms collapsed yesterday amid soaring gas and electricity prices that threaten to add hundreds of pounds to annual bills
A total of two million customers have been hit by the wave of collapses. Bosses of Pure Planet, which is backed by oil giant BP, said the surge in energy prices, coupled with a cap on how much they can charge, means they have been selling gas and electricity at a loss.
Co-founders Andrew Ralston, Chris Alliott and Steven Day said they were ‘heartbroken’ and warned more firms will fail.
They added: ‘The Government’s price cap, while protecting consumers from sky-rocketing global wholesale energy prices, is not matched by anything which protects suppliers.
‘Instead suppliers are being asked to fund the difference between the record costs of wholesale energy and what they are allowed to sell it for to consumers.
‘Suppliers are increasingly unable to cover their costs. Too many have gone bust already and more will in the future unless something changes.’
The bosses, of the firm based in Bath, Somerset, added: ‘The Government says it wants to support other energy-intensive and related businesses – steel, glass, paper makers – but it seems illogical to us to not support the supplier sector also.’
Pure Planet reported a £13.8million loss before tax last year.
Neil Lawrence, of Ofgem, said: ‘We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
‘I want to reassure affected customers that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue.’
He added: ‘Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.’