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Gas prices soar by up to 17% after Russian pipeline is halted and Norwegian supplier suffers outage 

Gas prices soar by up to 17% after Russian pipeline is halted and Norwegian supplier suffers outage

  • Gas prices jumped as much as 17 per cent in the UK yesterday
  • German regulators suspended approval for Russia’s gas pipeline into Europe
  • Wholesale gas prices reached highs of 240p per therm yesterday  


Gas prices jumped as much as 17 per cent in the UK yesterday after German regulators suspended approval for Russia’s controversial gas pipeline into Europe.

Wholesale gas was worth around 60p per therm at the start of this year. Yesterday that figure reached highs of 240p per therm – though it is still below a record of 350p set in early October.

Analysts at Energy Helpline said if the prices were to continue until February, energy regulator Ofgem could raise the cap on household bills on standard tariffs by £475. This would take it from the current level of £1,277 to £1,752.

The move by Berlin’s energy regulators came the day after Boris Johnson linked the £8billion Nord Stream 2 project to growing tensions in the East. German officials said the suspension was ‘temporary’ and the decision was seen as technical rather than political.

Gas prices jumped as much as 17 per cent in the UK yesterday after German regulators suspended approval for Russia’s controversial gas pipeline into Europe (stock image)

Tuesday’s jump was also driven by a reduction in flows of Norwegian gas into the UK due to an outage at the Troll gas field. And two more small suppliers – Neon Reef and Social Energy Supply, with a combined 35,000 customers – collapsed last night after the hike.

Although the UK does not import much gas directly from Russia, it receives a lot from Europe – which gets around 40 per cent of its supplies from Russia.

The sky-high prices have been seen most profoundly in the UK through the sudden collapse of a string of small energy suppliers – with more than 20 going bust since the start of September.

Sam Peek, analyst at Cornwall Insight, said prices could keep climbing into next week if there is cold weather and periods of low wind.

Concerns over the Nord Stream 2 project, which would bypass Poland and Ukraine by transporting natural gas to Germany under the Baltic Sea, have been renewed amid signs of Russian aggression on the border with Ukraine.

Concerns over the Nord Stream 2 project, which would bypass Poland and Ukraine by transporting natural gas to Germany under the Baltic Sea, have been renewed amid signs of Russian aggression on the border with Ukraine (file photo)

Concerns over the Nord Stream 2 project, which would bypass Poland and Ukraine by transporting natural gas to Germany under the Baltic Sea, have been renewed amid signs of Russian aggression on the border with Ukraine (file photo)

Although Nord Stream 2 is led by Russia’s Gazprom, Germany’s Federal Network Agency (FNA) said the Swiss-based consortium running the European end of the project would need to form a company under German law to obtain an operating licence.

Until that happens, the approval process will be suspended.

‘A certification for the operation of Nord Stream 2 will only be considered once the operator is organised in a legal shape compliant with German law,’ the FNA said in a statement.

The decision came after the Prime Minister, on Monday night, warned European leaders that there is a choice ‘shortly coming’ between ‘mainlining’ Russian fossil fuels or sticking up for Ukraine.

The decision came after the Prime Minister, on Monday night, warned European leaders that there is a choice 'shortly coming' between 'mainlining' Russian fossil fuels or sticking up for Ukraine

The decision came after the Prime Minister, on Monday night, warned European leaders that there is a choice ‘shortly coming’ between ‘mainlining’ Russian fossil fuels or sticking up for Ukraine

Downing Street stopped short of praising the German regulator yesterday but Mr Johnson ‘underlined’ the UK’s opposition to the project to his Cabinet, No.10 said, asserting it ‘would have significant security implications for the region’.

With Mr Wallace visiting Ukraine, Downing Street said the Government will continue to speak to European allies and Kiev over the pipeline.

‘Ukraine currently hosts the largest existing pipeline for Russian gas and transit fees have historically made up a large proportion of their GDP so Nord Stream 2 would divert supplies from the Ukraine that would have significant consequences for its economy,’ the Prime Minister’s official spokesman said.

‘And it could also have significant security implications and the transit of Russian gas through the Ukraine is largely seen as a deterrent against further Russian aggression.’

Read more at DailyMail.co.uk