22 March 2013

Super Spike in Gas Prices as Pipeline from Belgium shut down

A major pipeline supplying gas from Belgium had to be shut down at 7am this morning. Low reserves and high consumption due to cold weather meant record prices.

A technical problem with the supply pipeline from Belgium to Britain has led to wholesale prices increasing by over 50% to a record high today. Operators of the pipeline, Interconnector (UK) Ltd say the fault has been identified and they are working to rectify the issue but it is unlikely to be working before late afternoon.

Britain typically stores about 15 days worth of gas, compared with around 100 days for Germany and France. However after weeks of cold weather, gas stocks were already very low on Thursday night at just 10% of capacity compared to 49% this time last year with snow landing over large parts of the country and cold weather forecast until April.

If the pipeline remains out of action for a number of days, National Grid could be forced to trigger costly emergency supply options but a spokesman thought it unlikely, quoted by The Guardian as saying: "The cold weather is causing a bit of over-excitement here. Gas data shows the position at the end of the day will be quite healthy.”

Analysts have warned that the tight market conditions are likely to push up long-term prices and could result in increases of up to 15% before next winter.

You can protect yourself from increases in energy costs over next winter, most suppliers have energy deals that are fixed until next winter is over. There are even tariffs fixed for the next two winters though at higher prices now. Compare energy tariffs with MoneyMaxim.