The price of gas has rocketed in recent weeks, putting several energy suppliers out of business and prompting warnings of food shortages in UK supermarkets.
Wholesale gas prices have soared by 250% since the beginning of the year, including a 70% rise since August, according to the Oil & Gas UK trade body.
So why is this happening and how is it disrupting the country’s food supplies?
How reliant is the UK on gas?
The gas market is crucial to the UK’s energy supply because of its role in heating, industry and power generation.
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More than 22 million households are connected to the gas grid, the UK government says.
In 2020, 38% of the country’s gas demand was used for domestic heating, 29% for electricity generation and 11% for industrial and commercial use.
So why have wholesale gas prices increased?
One of the main reasons is an “uptick” in global gas demand as economies reopen after COVID lockdowns, according to the government.
It says this, combined with a cold winter in 2020-21 which prompted higher demand, has led to a “much tighter gas market with less spare capacity”.
Speaking on a visit to New York, Prime Minister Boris Johnson admitted there were “a lot of short-term problems” caused by gas supply shortages, but he added: “This is really a function of the world economy waking up after COVID.
“This will get better as the market starts to sort itself out, as the world economy gets back on its feet.”
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Energy boss: It’s ‘crunch time’ for many small providers
Russia accused of acting to push up gas prices
The European Commission has been asked to investigate the role of Russia’s state-backed gas company Gazprom in soaring gas prices across the continent.
A group of 40 MEPs has said the company’s behaviour had made them suspect market manipulation to push up gas prices.
In a letter, the MEPs said they were suspicious of Gazprom’s “effort to pressure” Europe to agree a fast launch to its Nord Stream 2 gas pipeline, which still has to clear regulatory hurdles that could take months to complete.
The MEPs cited incidents including recent shut-ins of some of Gazprom’s production and said the company had refused to book gas transport capacities through existing pipelines.
“All these factors allow to suspect that the record natural gas price surge in Europe in the recent weeks may be a direct result of Gazprom’s deliberate market manipulation,” the letter said.
In response to the accusations, Gazprom said it supplied its customers with gas in full compliance with existing contracts.
The European Commission said it had received the letter and would reply in due course.
UK’s wind power hit by calmer weather
Calm weather over the past two weeks has cut output from the UK’s 11,000 wind turbines, which account for more than 20% of electricity generation, according to Bloomberg.
It has meant that demand for natural gas to produce electricity has increased and Britain has turned to coal-burning stations to fill the energy shortfall.
Are there other reasons behind the gas price rise?
Other factors include high demand in Asia for liquified natural gas which has meant less than expected has reached Europe.
In the UK, several gas platforms in the North Sea have also closed for maintenance that was paused during the pandemic.
Meanwhile, cables that import electricity from France were damaged last week following a fire.
The National Grid said its site at Sellindge in Kent was evacuated following the blaze on Wednesday morning.
The fire and planned maintenance means it will be offline until 25 September and only half of its two gigawatt capacity available until March 2022.
Why have food suppliers been hit?
The steep rise in gas prices has caused two large fertiliser plants in Teesside and Cheshire which produce carbon dioxide (CO2) as a by-product to shut, hitting supply to the food industry.
CO2 is used in the humane slaughter of livestock and to extend the shelf-life of products. It is also vital to cooling systems for refrigeration purposes, industry leaders have said.
Producers have warned that supplies of meat, poultry and fizzy drinks could all be hit due to the shortage of CO2.
Nick Allen, chief executive of the British Meat Processors Association, has said the country could be two weeks away from British meat disappearing from supermarket shelves.
He told Sky News: “The meat industry, in particular the pig and poultry industry, use CO2 for humane slaughter. Eighty per cent of pigs and poultry are slaughtered using that process.
“CO2 is a by-product of fertiliser. Those plants closed, and they account for about 60% of the CO2 produced in this country. They closed at very short notice with no warning. It really hit us cold.”
Mr Allen said meat manufacturers have said they have between five and 15 days’ supply left.
He added: “Then they will have to stop. That means animals will have to stay on farms. That will cause farmers huge animal welfare problems and British pork and poultry will stay off the shelves. We’re two weeks away from seeing some real impact on the shelves.”
The Conservative Party has suffered its worst electoral defeat in years, losing more than half of its councillors who stood for re-election across England.
Labour hailed a “truly historic” result in Rishi Sunak’s own backyard of York and North Yorkshire, where David Skaith smashed Tory Keane Duncan by almost 15,000 votes.
The region, which was electing a mayor for the first time, covers Mr Sunak’s Richmond constituency and is an area Labour has historically struggled to compete in.
Speaking at Northallerton Town Football Club, Sir Keir Starmer said: “We’ve had a positive campaign here, and I am very, very proud to stand here as leader of the Labour Party to celebrate this historic victory.
“And it is a historic victory – these are places where we would not have usually had a Labour Party success but we’ve been able to create that success and persuade people to vote for us.”
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0:33
PM on ‘disappointing’ election results
Appearing alongside Lord Houchen at a victory rally, Rishi Sunak said: “I’ve got a message for the Labour Party too because they know that they have to win here in order to win a general election – they know that.
“They assumed that Tees Valley would stroll back to them – but it didn’t.”
This victory is likely to have quelled talk of rebellion among disenchanted Tory MPs who had threatened to oust the prime minister if the results proved a disaster, but it remains to be seen whether the Tories can hold on to the West Midlands mayoralty.
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3:25
Analysis: Local election results
Of the 107 councils that held elections on Thursday, 102 have declared their full results, with the Conservatives losing more than half of the seats it has been defending so far.
Some 468 Tory councillors lost their seats as the party lost control of 12 councils.
Sky’s election coverage plan – how to follow
The weekend: Sophy Ridge will host another special edition of the Politics Hub on Saturday from 7pm until 9pm. And Sunday Morning with Trevor Phillips will take a look back over what’s happened from 8.30am until 10am.
How do I watch?: Freeview 233, Sky 501, Virgin 603, BT 313, YouTube and the Sky News website and app. You can also watch Sky News live here, and on YouTube.
The Electoral Dysfunction podcast with Beth Rigby, Jess Phillips and Ruth Davidsonis out now, and Politics at Jack and Sam’s will navigate the big question of where the results leave us ahead of a general election on Sunday.
However, Labour suffered setbacks in Oldham and Kirklees, where it lost control of the councils after victories for independent candidates opposing its stance on Gaza.
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Further results are expected over the weekend, including key mayoral contests in London and the West Midlands.
Labour’s Sadiq Khan is attempting to secure re-election in London, while Conservative Andy Street is defending his position in the West Midlands.
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4:10
Sky News general election projection
Rumours had swirled in London since the polls closed that Mr Khan could have suffered a shock defeat to Conservative Susan Hall, however Sky News understands both parties now believe the incumbent will remain in City Hall.
The results of those elections are expected to arrive at 10pm in London and 2.15pm in the West Midlands.
Other results still to be announced include council elections in the South and West of England where the Liberal Democrats and Greens hope to make progress.
There are also metro mayoral elections yet to declare a winner in Greater Manchester, Liverpool City, North Tyneside, South Yorkshire and West Yorkshire.
After counting more than two million votes cast in the English council elections, a provisional National Share Estimate shows the Conservatives on just 26% of the vote, a 19-point drop compared with the 2019 general election and one of its worst ever performances in any set of local elections.
Labour‘s vote rises from 33% in 2019 to 35% on the current estimate, after more than half the wards have now declared.
The Liberal Democrats are on 16%, an increase of five percentage points on the 2019 election. This follows a familiar pattern where the party does better in council elections than in parliamentary elections.
Other parties, such as the Greens, Reform, and independents, are projected to be on 22%.
This figure assumes also that votes for the nationalist parties in Scotland and Wales, places where no local elections took place, are unchanged from the previous election. The same condition applies to the 18 seats in Northern Ireland.
Assuming these changes in vote share occur uniformly across each of the newly drawn parliamentary constituencies in place for the next general election, Labour wins 294 seats and would overtake the Conservatives – but falls 32 seats short of gaining an overall majority.
The Conservatives fall from 372 seats on the new boundaries to just 242 seats, a projected loss of 130 seats. The Liberal Democrats rise from eight to 38 seats.
As is usual in such projections, there are individual constituencies where the count of local votes shows a party “winning” a constituency when the uniform swing suggests otherwise.
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Two such examples are Aldershot and Plymouth Moor View, both of which fall to Labour when we aggregate local votes in wards lying within those constituencies.
Employing the same procedure, however, Labour’s seat tally suffers when local votes in constituencies such as Blackburn and Oldham West were “won” by independents when actual votes are counted.
Labour easily retains these constituencies when uniform swing is considered.
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The UK will appoint a new envoy to oversee a plan to ramp up the production of weapons and ammunition, which is now a “national priority”, the foreign secretary has revealed.
Lord Cameron, speaking on a visit to Ukraine, also underlined the importance of supporting the Ukrainian war effort against Russia, warning that the world was at an “absolutely critical tipping point” and Kyiv must prevail or else Europe faced a “very dangerous future”.
However, he cautioned against an idea from French President Emmanuel Macron to consider sending NATO troops to Ukraine to join the fight if Russia’s Vladimir Putin achieves a breakthrough, saying that such a move would be a “dangerous escalation”.
“I don’t think it is right to have NATO soldiers killing Russian soldiers,” the foreign secretary said in an interview in the western city of Lviv on Friday, having met President Volodymyr Zelenskyy and other top ministers in Kyiv on Thursday.
Lord Cameron made the two-day trip to reaffirm the UK’s commitment to Ukraine, which most recently includes a promise to transfer more of the British military’s own stockpiles of weapons, including precision-guided bombs and air defence missiles.
The UK has also promised at least £3bn worth of military assistance annually.
But Western nations are failing to deliver munitions to Ukraine’s frontline as quickly as Russia is rearming its military, with Russian troops gaining ground in the east in recent months.
President Putin put his economy on a war footing when he launched his full-scale invasion of Ukraine in February 2022 – something NATO allies are only slowly starting to move towards.
Rishi Sunak said last week he would increase UK defence spending to 2.5% of national income by 2030 – claiming this equated to an additional £75bn in investment.
He also said he was putting the UK defence industry on a “war footing” and added £10bn of new funding would be dedicated to domestic munitions production over the next decade.
Asked how Britain could force defence companies like BAE Systems, Thales and Babcock – that have to answer to their shareholders, not the government – to increase production lines at the required rate and scale without some kind of legislation to force them to act, Lord Cameron revealed the plan for a new envoy for defence production.
“There is a specific munitions strategy of £10bn which will do exactly what you are talking about – the ramping up of production,” he said.
“But crucially I think we can go further than that in terms of a specific defence envoy with the ability from the prime minister to go out and make sure we are doing those muti-year deals with the defence suppliers because we need not only to provide more weapons to Ukraine, we need to build up our own stocks.
“So this is very important, it is a national priority.
“The prime minister is giving the lead and I think the industry will respond.”
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Pushed on whether the new envoy – whose identity has not yet been revealed – would be the modern-day equivalent of someone like Lord Beaverbrook, who was tasked with expanding aircraft production during the Second World War, Lord Cameron said: “It is the 21st century so there won’t be a Lord Beaverbrook.”
But he signalled that the envoy’s ability to approach industry with a commitment to fund multi-year contracts for munitions would be key – and could also drive down cost.
“It is possible to go to the defence contractors and say to them: ‘You are not going to get the price you might have hoped for year after year after year because we are going to make a contract with you over the coming years to make sure we replenish our ammunition, our artillery, our long rage fires, our missiles’ – those crucial things vital for Ukraine but also vital for our own defence.”
As for why the government needed to appoint a specific envoy to this role, Lord Cameron said: “You need I think to have that direct line to the prime minister to make sure we are making this the national priority it clearly is.”
Cameron warns of ‘dangerous future’
Turning to the war in Ukraine, the foreign secretary said Europe faced “two futures” – one in which Ukrainian forces, backed by Western weapons, are able to push out the Russian invaders and secure what he called a “just peace”.
“That is a footing on which you can see great security and prosperity for us and for Europe,” he said.
But he warned: “A future in which Putin is successful and Ukraine is pushed back is I think a very dangerous future.”
Nations such as Moldova and even the NATO states of the Baltics would be worried that President Putin might turn his attention towards them next, Lord Cameron said.
In addition, the authoritarian regimes in Iran and China would be watching closely.
“I think we are at an absolutely crucial tipping point in global affairs,” Lord Cameron added.