Britain feels the chill as wholesale gas prices soar
Wednesday 07 January 2009
Demand for gas in the UK soared to the highest level in five years yesterday as a result of Russia's stand-off with Ukraine and the cold snap. Spot prices for gas rose yesterday from 59p to 75p a therm, and from 60p to 69p a therm for advance orders for today.
But Edward Cox, deputy editor of ICIS Heren's European Spot Gas Market, said British household bills were unlikely to rise as a result of the "within day" and "day ahead" rises.
British energy companies had bought most of their supply in long-term contracts six months ago. Most of Britain's imported gas comes from Norway, with Russian gas accounting for no more than 3 per cent of supply.
"I think there's a nervousness in the market but most traders are still confident it [the stand-off] will be resolved in the next few days," said Mr Cox.
Plunging temperatures in Britain mean that millions of pensioners and other vulnerable people – including 600,000 in London – will receive winter fuel payments of £25 a week. The scheme is triggered when average temperatures in an area fall or are forecast to fall below 0C for a week.
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