Calls for Contingency Plans for Rising Gas Prices

The Welsh Liberal Democrats have called on the Welsh Government to provide clarity on any contingency plans they have in place to deal with rapidly rising gas prices, citing the concern that many families could be pushed into fuel poverty as winter approaches.

The call comes as the price of wholesale gas has surged by 70 per cent since August putting several smaller suppliers out of business. Factors behind the surge include increased demand from a reopening economy, consumers as we head into autumn and reduced supply from Russia and Qatar combined with high demand from Asia.

While the energy price cap has stopped the most extreme wholesale price increases being passed onto most customers so far, there are concerns that the Conservatives could eventually bow to pressure from energy companies to scrap the cap while those who received their supplies from smaller companies that go under will be forced into new and more expensive contracts with other suppliers.

Commenting Welsh Liberal Democrat Leader and Mid & West Wales MS Jane Dodds said: “I am calling on the Welsh Government to publish contingency plans to help vulnerable families should energy prices significantly increase this winter.

“Fuel poverty is already a massive problem in rural Wales, with an estimated 17 per cent of all households in Powys living in fuel poverty. With single pensioner households and households in the private rental sector being particularly vulnerable. Following the COVID-19 pandemic, these numbers are likely to be higher now, as people have been at home more while earning less.

“Should consumer prices rise and the situation worsen, we could see a substantial increase in those suffering this winter. The Welsh Government must be prepared to assist local authorities in dealing with a potential rise in the number of people pushed into fuel poverty and wanting to access local schemes designed to assist those struggling to pay their energy bills.

“I am also concerned there is a risk that many people could be pushed over the edge by a combination of factors including the Conservatives cruel cut to universal credit payments, the end of the triple lock pension and higher consumer prices due to supply shortages.

“The current instability of the gas market shows the Conservatives in Westminster had taken their eye off the ball in diversifying our energy markets and moving away from gas as a power source. The crisis also demonstrates why in the long-term the Welsh Government must make insulation programmes an absolute priority so we do not see a repeat of this threat.

“Even before the threat of these price rises, we knew far too many people were being put under huge pressure, facing the impossible decision of whether to feed their family or stay warm.”

ENDS

NOTES FOR EDITORS

• A household is regarded as being in fuel poverty if they are unable to keep their home warm at a reasonable cost. In Wales, this is measured as any household that would have to spend more than 10% of their income on maintaining a satisfactory heating regime, as recommended by the World Health Organisation (WHO). This requires a minimum indoor temperature of 21 degrees centigrade in living rooms and 18 degrees centigrade in other areas. Any household having to spend more than 20% of their income on maintaining a satisfactory heating regime is defined as being in severe fuel poverty.

• A summary of the rise in gas prices by Oil & Gas UK can be found here.

• Details on discussions between the UK Government and major Energy Suppliers, including pushes for the energy price cap to be scrapped, have been published by the inews and are available here.

• The latest figures on estimated fuel poverty numbers in Wales are available from the Welsh Government’s 2018 report on fuel poverty.

• Fuel Poverty levels in Mid & West Wales are estimated at: Gwynedd (23%), Ceredigion (21%) Powys (17%), Pembrokeshire (15%) and Carmarthenshire (14%). This compares to the national average in Wales of 12%.