Gas crisis hitting farmers and 'Government cannot afford luxury of sitting back and waiting'
There's concern a knock-on impact means West Country farmers are being doubly hit by the current gas shortage - with a local MP calling for a resolution 'within a matter of days rather than weeks'.
Bridgwater and West Somerset MP Ian Liddell-Grainger says there's signs of fertiliser becoming harder to come by as a result of gas shortages.
He is also worried about supplies of dry ice to transport frozen goods, which comes from a by-product of the fertiliser making process - that relies on gas
Overnight the government confirmed it is holding firm on the energy price cap, despite the gas crisis.
Wholesale costs are soaring, and some small suppliers say they're at risk of collapse. It's being predicted there could be as few as 10 energy companies left in the coming months.
Energy companies and the Government agreed the energy price cap must "remain in place" during crunch talks yesterday to find a solution to record gas costs.
Business Secretary Kwasi Kwarteng held a crisis meeting with the industry before announcing to the Commons that ministers would not be bailing out energy firms and that the energy price cap would be "staying".
In a joint statement issued late on Monday evening, Mr Kwarteng and Ofgem chief executive Jonathan Brearley confirmed they had taken a unified position over the price ceiling continuing.
"Central to any next steps is our clear and agreed position that the energy price cap will remain in place," they said.
Mr Kwarteng had earlier told MPs the cap saves 15 million households up to £100 a year, adding: "It's not going anywhere."
Somerset MP Ian Liddell-Grainger says ministers must act ‘within days rather than weeks’ to return stability to the sector and guarantee supplies not only of gas but of fertiliser and CO2.
The MP said "A huge hike in gas prices exacerbated by interruption to electricity supplies from France has led to many smaller suppliers facing extinction.
"But apart from the domestic gas situation the closure of two major fertiliser plants on Teesside and in Cheshire – in each case because of the current gas price – has led to agricultural suppliers facing a desperate shortage and cut supplies of CO2, a by-product of the manufacturing process which is used to make dry ice. As a result deliveries of frozen foods are beginning to be affected.
"Few consumers could have known of the connection between farm fertilisers and frozen farm products, such as peas and beans.
“Now the complex inter-relationship of two apparently disparate sectors has been revealed it’s no wonder consumers are starting to get nervous,” he said.
“And since a fragmented gas industry already appears to be beset by impending business failures it is clearly the Government’s responsibility to step in and take charge.
“I am afraid this situation has revealed the fragility of certain areas of the economy which have been rather like an inverted pyramid balancing on the going rate for gas.
“Markets being what they are I am certain at least some of the price hikes we have seen recently will be reversed sooner or later. But the Government cannot afford the luxury of sitting back and waiting for it to happen.
“Farmers need fertilisers or we shall be facing the prospect of vastly lower yields and possibly food shortages. This all needs resolving within a matter of days rather than weeks."