Energy Secretary Ed Davey has ruled out energy companies hiking their prices due to the conflict in Ukraine as gas is typically bought 18 months in advance, and they should therefore be protected from short-term price fluctuations.
As it stands roughly 30% of gas in Europe is supplied by Russia and analysts have warned that prices may increase dramatically if sanctions are imposed on Russia.
Experts have, however, added that moderate winter temperatures mean many of Europe’s energy companies are in possession of larger than usual gas reserves.
Escalating conflict could lead to higher prices
Speaking on the BBC’s Andrew Marr Show, Davey said: “The companies tend to buy their gas forwardly, 18 months in advance. So they shouldn’t be using it as an excuse to put up people’s prices.
“But we have seen when this crisis broke there was a spike in oil and gas prices. They’ve now come down, but if there was an escalation, if there was a military conflict that went on for months and months, there could be an impact on prices.”
Britain should seek to be less dependent on energy exports
The energy secretary added that the Ukrainian crisis illustrated the need for Britain to develop its own sources of energy.
In this context, he commented on the need for additional energy to be produced via wind and nuclear power stations, as well as shale gas extraction.