The Government “stands ready to provide whatever support is needed to consumers” amid predictions of soaring energy bills because of the Middle East conflict.
Energy minister Michael Shanks told the Energy Security and Net Zero Committee that he “would give some reassurance” that the UK’s energy supplies were secure but said there was “no question” that the Middle East conflict “does have an impact on price”.
He said: “First of all, despite some scaremongering stories that have surfaced in the past two weeks, the UK has very strong energy supplies from a diverse range of sources.
“If we think about our gas supply for example, we have that from a number of different sources that are all still operating as normal. I spoke to the three LNG terminals just yesterday to confirm that that is still the case.
“If we think about fuel it’s really important to say that across the country we monitor very closely fuel supplies and there are no concerns at all about that fuel supply.
“Clearly we keep all these things under review, but it is important to re-state that publicly because clearly we want people to go about their lives refilling cars and everything else in the way they normally would, which is how we make sure that supplies continue to operate as normal.”
He added: “But there is no question that the situation in the Middle East and the uncertainty that that brings does have an impact on price and that’s why, really clearly, the Government has said look, we will fight the corner of consumers. We will do everything we can to first of all de-escalate the situation … but secondly to provide support wherever we can.”
Asked what would happen when Ofgem’s already announced price cap ends at the end of June, he said: “Clearly, what happens at the end of that price cap period is still being worked through.
“We’re at quite an early stage of what’s called the observation window looking at the range of factors that will lead to that.
“And although we’re now over slightly over two weeks into this conflict, in truth we don’t know exactly where this is going to go and when and, therefore, it’s far too early – and Ofgem have repeated this point themselves – it’s far too soon to say with any certainty exactly what that will look like.
“But clearly, as we get closer to that period we’ll have more evidence and be able to see what the price cap might do, and the Government and the Chancellor and the Prime Minister have said this, we stand ready to provide whatever support is needed to consumers.”
Committee chairman Bill Esterson asked about the possibility of removing further policy costs from bills, which currently make up £236 of price cap and were “a huge sum to play with”.
Mr Shanks said: “It’s an avenue that we have to look at very carefully.”
He added: “We also have to invest, and this can be a trade-off where we’re saying that we should simply take policy costs off with no consideration of the system we want to build for the future.
“At the same time as we want to protect consumers right now, we have to start building a system that protects them permanently and keeps bills low in the future.
“We look at every single part of the bill. We’re in regular contact with Ofgem about more that we could do together to really bear down on the costs of that.
“And every single bit of renewables that we build helps reduce the role that gas plays in setting the wholesale price, and that reduces people’s bills.”
