‘Endless is the victory.’
As it tries to outbid neighbouring countries for limited supplies as we head into winter, Britain is paying more for natural gas than continental Europe.
Data by the pricing agency Argus Media which was published by the Financial Times, found that UK gas prices for delivery rose to more than €1.6 per megawatt hour above the European benchmark, while prices for delivery next month have reached €1.5/MWh higher than Europe.
Both levels mark the widest points relative to Europe since late 2021, when Russia began reducing the amount of pipeline gas it sent, although the gaps have since narrowed slightly.
Gas storage facilities in Europe are almost full but is not enough to meet what Europe will need this winter. As a result, Europe will need to continue importing pipeline gas and liquified natural gas (LNG), meaning it will be in competition with the UK for supplies.
As the FT reports, the price difference has been worsened by structural problems in the UK’s gas system, including a lack of storage and high transmission costs. Britain can only store a maximum of 3.1bn cubic metres of gas, meaning demand has to be mostly met with imports. Conversely, countries like France, Germany and Italy, have between 15 and 25bn cubic metre capacity, meaning they rely less on imports. European nations are also interconnected with a network of pipelines, allowing flexible supplies between countries.
Around half of the UK’s gas needs are currently met by imports, and National Gas, which owns the country’s main transmission network, expects more than 60 percent of the UK’s gas to come from imports this winter.
Additionally, a shortage of available liquefied natural gas globally, means the UK is having to offer a much higher price to try to secure the supplies it needs.
If this winter is colder than average, the UK could pay even more over European prices, analysists have warned.
“Now that colder weather is setting in, driving up households’ gas use, the UK must compete with EU markets for available LNG and pipeline gas supply,” said Natasha Fielding, head of European gas pricing at Argus Media
The FT’s report sparked anger among Remainers who were quick to remind how Brexiteers promised the UK cheaper energy bills.
Boris Johnson made the claim several times during the EU referendum campaign in 2016. Leave campaigners argued Britain’s energy bills will be slashed by £2 billion a year if voters back Brexit because it would allow ministers to scrap the ‘unfair’ VAT tax on gas and electricity.
Boris Johnson told the Sun: ‘In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive.
“EU rules mean we cannot take VAT off those bills. The least wealthy are hit particularly hard. As a proportion, the poorest households spend three times more of their income on household energy bills than the richest households spend.
“As long as we are in the EU, we are not allowed to cut this tax. When we vote Leave, we will be able to scrap this unfair and damaging tax.
Remainers dismissed the claims at the time, with then chancellor George Osborne and former PM David Cameron branding it ‘fantasy economics.’
“Endless is the victory” wrote Sheffield for Europe, in response to the recent news that the UK is paying more for natural gas than continental Europe as we head into winter.
“Heating or eating? Since Brexit, energy costs have surged, forcing people to make impossible choices. The promises were cheaper bills; the reality is colder homes,” wrote the Rejoin EU Party on X.
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