The CEO of British Gas owner has said that soaring energy prices could last upto 2 years, with no hope of them coming down soon
The Berkshire based British multinational energy and services company Centrica has said that soaring energy prices which threaten the living standards of millions could last upto 2 years, with no hope of them coming down soon.
The Chief Executive of Centrica – Chris O’Shea, warned that the hope that bills rising by more than 50% to about £2,000 a year would be short-lived may be misplaced.
Gas is the best alternative to carbon-intensive energy sources, such as oil and coal. Many countries prefer moving to gas as they commit themselves to creating a sustainable environment.
Chris O’Shea said, “As we move towards net zero, gas is a big transition fuel. And so as you turn off coal-fired power stations in other countries, there isn’t an abundance of gas that you can just turn on quickly”
The countries are opting for gas as a “transitional fuel”, rather than as a traditional hydrocarbon, as there is a call for increased investment in boosting the supply of gas from domestic sources such as the North Sea.
However, Chris O’Shea was doubtful that higher levels of United Kingdom (U.K.) sourced gas would have made much difference to surging prices. “I’m not sure an increase in UK supply would have brought the price down from £ 3 a therm, as it was in December, from 50p as it was a year ago,” said Chris.
Centrica procures gas from United States (U.S.), Norway, Europe, Qatar and from other places. So, they cannot have U.K. as an isolated energy market.
Chris also proposed 3 measures that Government can undertake to bring down the cost of living for Britons. First, it can defer the cost incurred by surviving suppliers from taking on customers of the many companies that have gone bust, rather than it be added to upcoming bills. Second, it can remove the 5% VAT on energy, temporarily or permanently. Third, Government should move levies charged to fund a green transition from bills to general taxation.
Chris also said, “Those three things together, could be enacted very quickly, without regret. And that would take care of half of the price rise. And then you could get a further relief targeted to those households that needed most.”
Besides, the Government is planning to provide relief through changes to the Warm Homes Discount Plan, which currently offers a one-off payment of £ 140 to those in receipt of certain benefits.
Another option which the industry players suggest is Government should provide loans or funds, which the energy companies can borrow from them when wholesale prices are high and pay back once they’ve fallen. Meanwhile, the Government has said it will decide on a possible support to the industry before February 7, 2022.
