[UK] High gas price risks fuel poverty

From The BBC

Higher UK gas prices could mean more vulnerable groups suffering with the elderly needing help, the Commons Trade and Industry committee says.

Following its report into the UK gas supply, MPs also warned that large industrial and commercial users faced surging costs and shortages.

High prices are being blamed on a lack of supply from Europe at a time when UK North Sea production is dwindling.

Firms and consumers are worried that a cold winter may push costs even higher.

'Further assistance'

Most major energy suppliers have put up their bills recently, some by as much as 15%.

Price rises have been blamed on the high prices paid for gas on the wholesale market.

In the report, Inquiry into Security of Gas Supply, MPs played down concerns about rising prices but said it was possible more people could fall into fuel poverty.

The report added: "If fuel prices continue to rise it will be essential to provide further assistance to the elderly."

Fuel poverty

Fuel poverty describes someone who spends more than 10% of their income on keeping themselves warm.

The committee said it was disappointed with the progress made when dealing with the plight of "non-elderly vulnerable groups, particularly disabled people, whose difficulties in relation to fuel poverty have been known for a long time".

While the majority of domestic customers and businesses are unlikely to have any problems with supply, some of the largest industrial and commercial firms may struggle to get enough gas to meet demand, the committee said.

"Gas supplies are likely to be tighter than was anticipated," it warned.

As a result, the largest users may either have to suffer interruptions to their supply or pay very high prices.

'Legacy'

"The problem is caused not only by matters outside the control of government, but also by a legacy of slow development of infrastructure, and the lack of a true European market for gas," the committee said.

The government can do little to directly affect the price of gas, but does have a role to play in ensuring the European market is opened up, and that the largest firms co-operate to guard against shortages.

The committee praised the government for work in those areas, but warned that unless further steps were taken then the UK risked having "a malfunctioning forward gas market for a decade".

It added it should consider giving firms temporary licenses so they could use other forms of fuel to meet energy needs.

Doing so would not compromise the government's long-term environmental goals, it said.

On Monday, the Office for National Statistics (ONS) said that business gas prices surged 44.9% in November, the biggest monthly rise since records began in 1991.