Natural Gas: Prices

(asked on 20th September 2021) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment his Department has made of the reasons for the increase in wholesale gas supplies.


Answered by
Greg Hands Portrait
Greg Hands
Minister of State (Department for Business and Trade)
This question was answered on 28th September 2021

As set out by my Rt. Hon. Friend the Secretary of State on 20 September, higher wholesale gas prices have been seen internationally in 2021. A number of factors have contributed to this increase. This increase in global gas prices is reflected in the British wholesale gas market.

There has been an increase in global gas demand as a result of economies rebounding following the removal of measures put in place to contain the Covid-19 pandemic. Combined with low levels of European gas in storage following a cold winter in Europe, this has led to a much tighter gas market with less spare capacity. In addition, high demand in Asia for Liquified Natural Gas (LNG), which is transported globally by ship, and weather events in the US, have meant less LNG than expected has reached Europe.

Gas production has also been reduced, with several planned and unplanned outages, such as in Norway and the US. Other factors include essential maintenance, including projects rescheduled from 2020 due to the Covid-19 pandemic.

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