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Last Updated: Tuesday, 22 November 2005, 13:10 GMT
Gas price surge shows no slowdown
Norwegian gas producing platform
The UK is waiting for increased supplies from Norway
The UK's cold snap has driven the wholesale price of gas up to its highest level since March.

As well as the weather, traders blamed problems at some North Sea gas rigs and a lack of supplies from the continent for the rise to 1.40 a therm.

Tuesday's gains follow a 50% surge on Monday in spot prices, the price firms pay for gas needed right away.

The past two weeks have produced hefty increases, leading to concerns of problems for high-use UK industries.

Fears have been growing among business leaders over future power supplies and rising gas costs.

Last week Pilkington, the UK's leading glassmaker, was forced to move from using gas to oil to run its UK operations because it could no longer afford to pay its large gas bill.

'Slow' market reforms

On Monday the CBI called on the government to hold a public consultation on the feasibility of creating a new generation of nuclear power stations.

Director-general Sir Digby Jones warned that high-use large industrial outfits, such as chemicals firms, may have to "throw the switch" if the price of gas continued to rise.

There have been claims that the high price is due to a failure in continental Europe to free up their markets.

Energy Secretary Malcolm Wicks on Tuesday called for his EU counterparts to hold discussions on the "serious malfunctions" in the European energy market.

He told the BBC he accepted there was a problem in the short term, and added: "Although the European Union is meant to have market liberalisation across the 25 countries that's been slow to happen in practice, which is why as we now have the presidency of the EU we will be pushing this very hard."

He also said that North Sea supplies had run down quicker than had been expected and that a pipeline from Norway will not be fully operational for another year.

His comments come a week before he chairs the EU Energy Council in Brussels.

'Energy security'

Meanwhile Tony Blair has been telling MPs "controversial and difficult" decisions will have to be taken over the question of whether nuclear power is the way to tackle the UK energy crisis.

He told the influential Commons liaison committee: "With some of the issues to do with climate change, and you can see it with the debate about nuclear power, there are going to be difficult and controversial decisions government has got to take.

"And in the end it has got to do what it believes to be right in the long-term interests of the country."

He conceded there were strongly held positions on issues such as nuclear power.

"About energy security and supply that will mean issues that are bound to be extremely controversial," he said.




SEE ALSO:
Blair says nuclear choice needed
22 Nov 05 |  UK Politics
PM 'convinced' on nuclear future
21 Nov 05 |  Business
Supply fears amid gas price surge
18 Nov 05 |  Business
EU threatens action on gas prices
15 Nov 05 |  Business


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