The department of Business expects to get Prime Minster Boris Johnson’s backing for a package to help energy-intensive industries’ as gas prices soar.
On Monday, business secretary Kwasi Kwarteng asked the Treasury to support firms hit by rising energy costs. The proposal could involve loans worth hundreds of millions of pounds. The treasury has said to be still analysing the proposal, while number 10 has declined the comment.
Prime Minister Boris Johnson is reportedly gearing up to offer struggling businesses in gas-intensive industries a support package, as energy prices soar.
The BBC and FT reported that the department for Business is expecting new measures, with the treasury looking at proposals.
Business secretary Kwasi Kwarteng the Treasury to support firms on Monday as production as gas-intensive industries, such as the steel and concrete sectors.
Crippling energy costs have forced manufacturers to warm of knock-on higher costs for goods. Some have moved to shut down factories and plants as it is uneconomical to continue to produce under current conditions.
The issue extends beyond the industry. Last week, the national grid (NG.L) issued a stark warning that the UK is facing a greater threat of blackouts this winter, as well as tight electricity supplies.
The companies electricity system operator (ESO) said Britain’s infrastructure will be able to get enough gas to see it through the winter period, but cut its forecast of buffer supply.
Around half of the country, gas demand is used to hear home, while another quarter is used to generate electricity.
National Grid oversees the country’s energy supply and ensures supply and demand are evenly balanced. The ESO is a legally separate business within National Grid.
in recent weeks, nine small energy suppliers have gone bust amid soaring energy prices.
Wholesale gas prices have already surged more than six-fold, while the price cap on energy bills has risen £139 ($188) to £1,277. Experts have predicted that it could rise by another also £400 in April.
According to the research from Cornwell insight, energy bills could climb by as much as 30%next year if gas and electricity prices continue to rise, and more suppliers go under. it expects the energy price cap to increase to around £1,660
Reasons behind the dramatic increase in power prices could include low gas reserves, strong commodity and carbon prices, heightened global demand, and low wind output.