Families in Britain should turn down their heating by a degree to cut down Western reliance on Russian gas, the world’s energy watchdog has declared.
The International Energy Agency (IEA) said its ten-point plan would cut gas imports from Russia to the European Union by more than a third in the coming year.
European homes have an average temperature of 22C. It said that adjusting thermostats 1C would allow the West to save approximately 10billion cubic meters of gas per year if combined with other measures such as a windfall tax for fossil fuel companies.
Fatih Birol, the IEA’s executive director, said: ‘Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon shows that Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter.’
The watchdog has also advised the West not to sign any new gas contracts with Russia’s state-owned energy company Gazprom, or to renew expiring deals.
On Thursday, the ten point plan was published.
Since Vladimir Putin cut supplies to Europe in advance of his invasion of Ukraine, gasoline prices have reached record highs.
Barbara Pompili, minister for ecological transition for France, holder of the EU’s revolving presidency, said: ‘More than ever, getting rid of Russian fossil fuels and of fossil fuels in general is essential. What is at stake is both the need to accelerate the fight against climate change and, as we can see now, the short-term energy security of the European continent.’
The European Commission will use the IEA’s proposals to inform its own plan of action on energy in response to the war, to be published next week.
Kadri Simson, the EU’s energy commissioner, called Russia’s attack on Ukraine ‘a watershed moment’ in the shift away from gas.
According to Unison, UK gas imports have increased by twofold since 2018. Despite a ban against Russian-owned vessels docking in British ports, the ships carrying Russian gas are expected to reach Kent’s Isle of Grain this weekend.
Russia supplies around 30 per cent of Europe’s gas and oil – and one in ten barrels of the world’s oil – and the UK has become increasingly reliant on it.
The rising cost of buying oil and gas is good news for Russia’s tyrant as it was revealed that the West is still paying Moscow more than $1billion-a-day for fossil fuels which Putin can use to subsidise the $20billion-a-day invasion of Ukraine.
The International Energy Agency (IEA), in a ten point plan, stated that adjusting thermostats to 1C will save approximately 10 billion cubic metres of gas per year if combined with other measures such as a windfall tax for fossil fuel companies, and delaying the closing of many nuclear power stations.
Fatih Birol, executive director of the International Energy Agency, warned: ‘Russia is using its natural gas resources as an economic and political weapon. This is clear to everyone in the world’
Bovanenkovo, the Arctic Circle’s gas field located on Yamal Peninsula in Yamal. This is the main source of liquid natural gases for which Britain spends billions.
As oil prices reached $119 per barrel, the market panic over a shortage of supplies caused the price to rise.
National Grid Grain LNG in Grain, Kent where two Russian-gas-laden ships are due to arrive on Saturday according to the unions
Each year around 33 Russian shipments arrive in the UK, most of them from Yamal Peninsula in the Arctic Circle. It appears there was a shift in strategy, as fuel was transferred to non-Russian vessels in Europe to allow them to continue their voyage to avoid any sanctions.
Alex Froley, an analyst at Icis, said: ‘If Russian-controlled ships can still land in continental Europe, companies may be able to swap schedules around to avoid a significant change in overall supplies to Europe.’
Labour MP Darren Jones, chairman of the Commons business and energy select committee, told The Times: ‘Ministers must urgently map our exposure to Russian energy… and then set out what action will be taken to reduce that exposure to zero.
‘We should do this in partnership with European allies and collaborate on a Europe-wide resilience package that cuts off Russian energy dependence as quickly as possible.’
‘Russia supplies around 30 per cent of Europe’s gas and oil imports and accounts for around 11 per cent of world oil production,’ said Shane Oliver, head of investment strategy at fund manager AMP.
‘In short, investors are worried about a stagflationary shock.’
Russia’s invasion of Ukraine has catapulted the price of gas and oil upwards to record levels with British households warned that they could soon be paying more than £3,000-a-year to heat their homes.
This week, UK wholesale gas prices – the price paid by energy companies – briefly topped £4.50 per therm – up from £2.50. It then settled at around £4, more than ten times the level a year ago when it was around 35p.
Britain imports approximately four percent of its gas in liquid form from Russia. Market analysts say that the spike is in part due to uncertainty caused by the Government’s decision to ban Russian ships from UK ports.
Experts say that if it remains at this price, household gas bills for millions of Britons already squeezed by the cost-of-living crisis will be in excess of £280-a-month or through £3,000-a-year by the autumn.
The Government’s price cap will go up by £693 on April 1 to £1,970, but analysts from Cornwall Insight are forecasting an Autumn price cap at £2,497 a year.
Joe Malinowski, founder of TheEnergyShop, has said: ‘Depending upon how the situation unfolds, gas prices could literally go anywhere. Although we do not rely as heavily on Russia for gas supply security as Europe does, our prices are tied to the price of gas on the Continent.
‘The best we can hope for is that wholesale gas prices don’t go up much more. All other scenarios are varying degrees of bad.’
Russia and Ukraine are the largest exporters of wheat in the world, with more than 25% of global production. They also produce over 80% of sunflower oil from their seeds. Analysts Capital Economics said: ‘Most of these exports leave from Black Sea ports, at the heart of where conflict might occur.’
It is possible for crops to be destroyed by fighting. According to estimates, rising prices in agriculture would increase the cost of living by 0.2-0.4 percent. This is already projected to reach 7.25 percent in April.
London traders are already concerned about the rising inflation due to the pandemic. They also fear that central banks will raise interest rates in an attempt to control prices. This could make it more costly to borrow money.
Russ Mould, of AJ Bell, an investment company, said that war would see ‘markets go through a difficult period for longer than people might have previously expected’.
Fawad Razaqzada, a market analyst at ThinkMarkets, explained: ‘Western sanctions on Russia have so far excluded energy shipments, but traders have pushed up oil and coal prices sharply higher anyway, with gas prices also remaining supported.
‘The crude oil market was already tight, even before the invasion of Ukraine by Russia.
‘But now there are concerns that because of the ongoing situation, foreign refiners are going to be very reluctant to buy crude oil from Russia, with some banks also refusing to finance shipments of Russian commodities.
Gaz prices reached their peak last year, and they are now flying higher due to Putin’s influence on Europe’s oil and gas pumps. Today’s price of one therm was 450p, which is more than 10 times higher than the price a year ago.
The LNG tanker vessel ‘Arctic Discoverer’ was seen arriving at National Grid’s Grain Facility in Kent last month.
‘In effect, this is the same as an actual drop in Russian exports of crude oil. Moscow has to sell its oil as soon as possible, or else there will be an oil-price shock that is even greater.
‘The unthinkable would be if fresh measures are introduced that would directly target oil and gas exports from Russia, or if the latter retaliates by turning off supplies of these commodities to its western neighbours in Europe.
‘An energy-dependent Europe will want to avoid this situation, nearly at all costs. But traders are not taking any chances as fighting in Ukraine intensifies, while international payments to and from Russia become increasingly very difficult with the West’s decision to exclude several Russian banks from the Swift global financial messaging system.’
As suppliers increase charges for next month, millions of homes have been informed about eye-watering increases in their energy bills.
Because of the Russian invasion in Ukraine, experts advise customers to be on the lookout for attractive fixed deals.
Ofgem, an energy watchdog, revealed last month plans to increase its price cap of 54 percent for 22,000,000 families who subscribed to standard tariffs beginning April 1. This will push up the cost of the average household bill by £693 to £1,977 a year.
Emails and letters detailing how much customers will be charged are flooding in thick and fast.
Hauliers demand ministers take action over record fuel prices that they say are ‘wiping out’ profits as average cost of petrol rises above £1.52 a litre for the first time following Russia’s invasion of Ukraine
Hauliers have called on British ministers to take action over record fuel prices that are ‘wiping out’ their profits as the average cost of petrol rises above 152p per litre in the days following Vladimir Putin’s lawless invasion of Ukraine.
Figures from data firm Experian Catalist show the average cost of a litre of petrol at UK forecourts passed 152p on Wednesday, up from 151p on Tuesday. The cost of diesel rose from 155.23p to a new high of 155.79p over the same period, the body added.
Oil prices reached an eight-year high last week due to concerns over the reliability of supplies after Russian forces invaded the former Soviet republic. Brent crude reached a 10-year high of nearly 120 US dollars per barrel on Thursday.
The RAC warned ‘further price rises are inevitable in the coming days and weeks’ because UK fuel prices are determined by the cost of oil and the US dollar-pound exchange rate.
Trade body the Road Haulage Association (RHA) has urged the Government to delay upcoming changes to the use of untaxed red diesel by 12 months.
Queues at the Tesco Petrol station in Newmarket, Suffolk on Wednesday morning as petrol prices soar to their highest
It called for fuel duty to be frozen for a further two years, and greater flexibility with the Apprenticeship Levy to help address driver shortages. The organisation also wants more lorry parking facilities and the continuation of skills bootcamps to train the next generation of drivers.
RHA executive director for policy and public affairs Rod McKenzie said: ‘Ours is a low margin industry – the average haulage business makes an annual profit of 3 per cent. Put another way, the weekly profit of a truck may be £80 but the increase in the price of fuel can equate to between £77 to £87 per week per truck, thereby completely wiping out any potential profit.
‘Of course, hauliers can put up prices. That will add to the general escalating pressures on inflation for everyone. That’s bad for our businesses, some of whose existence is now threatened, and indeed for all of us in the UK as prices rise.
‘But the Government can, and we think should, do something about it.’
Fuel spokesman Simon Williams added: ‘As this period of record high prices could be here for some considerable time, drivers may need to take steps to keep their costs under control. Driving less may be an option for some, but those who depend on their cars will have to try to buy their fuel at the best possible price and then drive as fuel efficiently as possible.’
Experian Catalist figures have shown that the average petrol price at UK forecourts was 152p, an increase of 151p. Diesel prices rose by 155.23p, to an all-time high of 155.79p during the same time period.