The British government has decided to disengage from Russian fuel by the end of 2022, but analysts warn of economic “suffocation” of households.
The British government had warned and warned that it would impose even tougher sanctions on the Putin regime. Following the historic speech of Ukrainian President Volodymyr Zelensky in the British Parliament, Boris Johnson also announced the decision of the United Kingdom to gradually ban the import of Russian oil and gas until the end of 2022.
The decision is dynamic and Energy Minister Kwasi Quarteng, as he stated, “gives companies enough time to find alternative energy providers”.
New wave of increases in bills
But the same time and choice is not given to consumers, who are already facing the rising cost of living due to the pandemic. The domino effect of price increases was confirmed by the Association of British Energy Companies (Energy UK), with director Emma Pinsbeck warning, “these are very worrying times for both the industry and consumers.”
It is noteworthy that despite the low percentage of the United Kingdom’s needs for Russian energy production, which is only 8%, the country in March 2022 recorded a 142% increase in the wholesale price of natural gas, corresponding to that of the European Union (144%) , which is much more dependent on Russian energy.
In the aftermath of the pandemic, it was decided to increase the gas price cap in April. Following the latest developments, analysts estimate that the upward trend will continue, with the average energy cost for a household in the UK estimated at 000 3,000 a year.
Deputies in Sunak pressure to reduce taxes
While businesses and consumers can not react immediately to these energy price increases, Conservative MPs are pushing British Finance Minister Richie Sunak to cut taxes to make up for the situation and support households. After all, he himself, after the announcement of the new sanctions against Russia, agreed that “the weakest households will be hit hardest”.
The Center for Economic Research (CEBR) also estimates that sanctions combined with rising oil prices will limit the UK’s growth rate to 1.9% from 4.2% initially forecast.
In the long run, the UK’s core strategy is to focus on renewable energy and increase domestic production, in order to avoid similar shocks in the future.
Zoe Katzagiannaki, London
Source: Deutsche Welle
Source: Capital
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