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The Markets
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The Markets
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Oil & Gas

UK spending on gas up by 400% since start of Ukraine war

The UK will have spent 400% more on gas in the year since the Ukraine war started, according to the Energy & Climate Intelligence Unit

Spending on gas in the UK has skyrocketed by £50bn to £60bn in the past year since Russia invaded Ukraine, according to the Energy & Climate Intelligence Unit.

By February 24, a year after the war began, the UK will have spent between £60bn to £70bn on wholesale gas, far higher than the £10bn to £20bn paid typically before the invasion.

Annual spending on gas per household rose from £200 to £1,000, analysts from the group estimated, an increase of 400%, although much of this was footed by public funding.

Wholesale gas prices increased from US$4.60 per British thermal unit following the start of the war, to a peak of US$9.71 in August, a rise of over 110% - although these have now fallen to pre-invasion levels.

Britain’s reliance on imported gas has seen it worst hit in western Europe by rising prices though, the International Monetary Fund said last year, since roughly 40% of the country’s electricity is created using the fuel, alongside its use in 85% of homes.

“As a nation, we’re incredibly dependent on gas,” commented the group’s head analyst Simon Cran-McGreehin.

“The price of gas is largely set by international markets, so the only way to protect yourself is to use less,” he added.

The government’s energy price guarantee has somewhat protected households from price hikes since October, capping bills to £2,500.

Support is set to reduce come April however, meaning bill payers could be charged up to £3,000 on an annual basis, slightly below forecasts for regulator Ofgem’s price cap, which is expected to limit suppliers to charging around £3,300.

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