As winter approaches, UK pays more for gas than EU, sparking anger among Remainers

‘Limitless is the victory.’

Because it tries to outbid neighbouring international locations for restricted provides as we head into winter, Britain is paying extra for pure fuel than continental Europe.

Knowledge by the pricing company Argus Media which was revealed by the Monetary Occasions, discovered that UK fuel costs for supply rose to greater than €1.6 per megawatt hour above the European benchmark, whereas costs for supply subsequent month have reached €1.5/MWh greater than Europe. 

Each ranges mark the widest factors relative to Europe since late 2021, when Russia started decreasing the quantity of pipeline fuel it despatched, though the gaps have since narrowed barely.

Fuel storage services in Europe are nearly full however is just not sufficient to fulfill what Europe will want this winter. Because of this, Europe might want to proceed importing pipeline fuel and liquified pure fuel (LNG), that means will probably be in competitors with the UK for provides.

Because the FT stories, the worth distinction has been worsened by structural issues within the UK’s fuel system, together with an absence of storage and excessive transmission prices. Britain can solely retailer a most of three.1bn cubic metres of fuel, that means demand must be largely met with imports. Conversely, international locations like France, Germany and Italy, have between 15 and 25bn cubic metre capability, that means they rely much less on imports. European nations are additionally interconnected with a community of pipelines, permitting versatile provides between international locations.

Round half of the UK’s fuel wants are at the moment met by imports, and Nationwide Fuel, which owns the nation’s principal transmission community, expects greater than 60 p.c of the UK’s fuel to come back from imports this winter.

Moreover, a scarcity of obtainable liquefied pure fuel globally, means the UK is having to supply a a lot greater value to attempt to safe the provides it wants.

If this winter is colder than common, the UK may pay much more over European costs, analysists have warned.

“Now that colder climate is setting in, driving up households’ fuel use, the UK should compete with EU markets for obtainable LNG and pipeline fuel provide,” mentioned Natasha Fielding, head of European fuel pricing at Argus Media

The FT’s report sparked anger amongst Remainers who had been fast to remind how Brexiteers promised the UK cheaper vitality payments.

Boris Johnson made the declare a number of occasions through the EU referendum marketing campaign in 2016. Go away campaigners argued Britain’s vitality payments will likely be slashed by £2 billion a 12 months if voters again Brexit as a result of it could permit ministers to scrap the ‘unfair’ VAT tax on fuel and electrical energy.

Boris Johnson advised the Solar: ‘In 1993, VAT on family vitality payments was imposed. This makes fuel and electrical energy way more costly.

“EU guidelines imply we can not take VAT off these payments. The least rich are hit significantly exhausting. As a proportion, the poorest households spend 3 times extra of their earnings on family vitality payments than the richest households spend.

“So long as we’re within the EU, we’re not allowed to chop this tax. After we vote Go away, we will scrap this unfair and damaging tax.

Remainers dismissed the claims on the time, with then chancellor George Osborne and former PM David Cameron branding it ‘fantasy economics.’

“Limitless is the victory” wrote Sheffield for Europe, in response to the latest information that the UK is paying extra for pure fuel than continental Europe as we head into winter.

“Heating or consuming? Since Brexit, vitality prices have surged, forcing folks to make unattainable decisions. The guarantees had been cheaper payments; the truth is colder properties,” wrote the Rejoin EU Social gathering on X.