Yesterday, Russia stopped gas delivery to the Ukraine. This happened after a night-long conference, chaired by Mr Oettinger, the EU ‘energy tsar’.
Briefly, Russia demanded that Ukraine either pay the debt accrued – over $1.4 billion – or that they would have to pay up front before delivery. The price demanded – around $385 per 1000 cubic metres.
Without going into the particulars of who is right and who is wrong – this is now a matter for the Stockholm Chamber of commerce where energy disputes are being adjudicated – it obviously will affect us here in the UK.
In the first instance, the EU will help the Ukraine to pay either for the debts or for the difference between the price the big energy firms will demand to ‘re-sell’ gas to the Ukraine, such as RWE who are already on record as saying they are prepared to send gas to the Ukraine.
Will Cameron be able to say the UK won’t give a penny for this? You decide …!
In the second instance, gas prices will inevitably rise. This is a simple question of supply and demand. Less gas being available because Eu states will send gas abck to the Ukraine means higher prices. Already these prices have jumped on the world market, see this interesting report on Bloomberg Business Week.
Given that our own domestic energy costs are already high, thanks to green surcharges, it is not difficult to anticipate a rise in these prices come autumn and winter. Should we have a more traditional winter, unlike the past one, with longer cold spells, it doesn’t take a genius to predict that many more people will end up in fuel poverty, and will shiver in their homes.
The blame for this can be put firmly on the current government, not just for their green-tinged energy policies, but for their supine attitude to all things EU.
If we were not a member, we wouldn’t have to pay either for the green surcharges nor for extra money to support an unreliable regime which is trying to cheat another country out of paying for a commodity already delivered.
This will translate into another nice number of votes for us, come the GE next May.
So – we’ll in fact be shivering for UKIP!