THE TORY government claimed yesterday that there is no threat to the UK gas supplies, despite four energy privateers being widely tipped to go bust this week, while food suppliers are warning that they are ‘on a knife-edge situation’.
Business Secretary Kwasi Kwarteng said yesterday that energy security is ‘an absolute priority’ for the government and that: ‘While we are not complacent, we do not expect supply emergencies this winter.’
However, the wholesale price of gas has jumped by 250% this year, according to Oil & Gas UK and consumers are facing a big hike in bills.
But perhaps the more immediate threat to supplies is a shortage of carbon dioxide used in the food industry, leading to predictions of food shortages and empty supermarket shelves.
The fertiliser industry has seen two huge plants in Teesside closed down this year as the gas price has made them uneconomic – which has caused knock-on shortages of CO2 – a by-product of fertilisation production.
CO2 is used to stun animals before slaughter and as a coolant agent in transport, as well as a shelf life expending agent in food packaging.
Richard Griffiths, CEO of the British Poultry Council, has said yesterday that the current situation feels more serious than previous CO2 shortages and that ministers need to act quickly to ensure the government delivers on its promise to ‘save Christmas’.
Andrew Opie, director of food and sustainability at the British Retail Consortium, said this ‘could not come at a worse time’.
He warned that the government must work with industry to find a solution quickly so that problems ‘don’t escalate further’.
Nick Allen, the chief executive of the British Meat Processors Association (BMPA), said: ‘This crisis highlights the fact that the British food supply chain is at the mercy of a small number of major fertiliser producers – four or five companies – spread across northern Europe.
‘We rely on a by-product from their production process to keep Britain’s food chain moving.’
About 20 million birds per week are slaughtered, but abattoirs only hold a limited stock of carbon dioxide.
British Poultry Council chief executive Richard Griffiths said: ‘With fewer than 100 days to go until Christmas, and already facing mounting labour shortages, the last thing British poultry production needs is more pressure.
‘If CO2 supplies become tighter and more unpredictable then supply chains will have to slow down. Ultimately, no CO2 means no throughput.’
He said the industry group’s members ‘are on a knife-edge situation at the moment’.
Shadow business secretary Ed Miliband warned: ‘It is a fundamental failure of long-term government planning over the last decade that we are so exposed and vulnerable as a country and it is businesses and consumers that are paying the price.’
‘This is incredibly serious,’ one supermarket executive said. ‘Some suppliers are telling us they could run out of CO2 in less than two weeks.’