Johnson Calls Gas Price Surge ‘Temporary’ U.K. Problem
Johnson Calls Surge in Gas Prices a ‘Temporary’ U.K. Problem
(Bloomberg) -- U.K. Prime Minister Boris Johnson said the unprecedented surge in natural gas prices is a “temporary” problem caused by the global economy bouncing back after the pandemic, arguing a “phenomenal demand for gas” in Asia has affected U.K. supplies.
“I want to give a general reassurance that the problems we’re seeing are temporary,” Johnson told reporters traveling with him to the U.S. “They are caused by the resurgence of the global economy as Covid starts to retreat in parts of the world.”
He said he is “very confident” in the U.K.’s supply chains and will work with gas companies to ensure the consumer’s needs are met.
Business Secretary Kwasi Kwarteng spent the weekend in talks with senior executives from energy companies and will continue discussions on Monday after at least five U.K. energy suppliers were forced to shut.
He said the energy regulator Ofgem has measures in place to ensure gas and electricity delivery will continue as Britain enters its colder winter months. Natural gas is crucial to power generation for homes and industry and for heating in winter, with more than 22 million homes connected to the grid in 2020.
Britain has also suffered from a shortage of drivers of heavy goods vehicles leading to delays in deliveries of food and warnings from retailers that toys may not arrive on shelves in time for the festive season. Johnson compared the current turbulence to the classic novel Gulliver’s Travels, where the hero is caught and pinned down by tiny people.
“On the current supply-chain squeeze, it is fundamentally caused by the global economy coming to life again: the guy ropes are pinging off Gulliver and it’s standing up, and it’s going to take a while, as it were, for the circulation to adjust,” he said, denying the issues could take months to resolve.
“I think market forces will be very, very swift in sorting it out, and we’re going to do whatever we can to help,” he added.
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