This announcement comes fast on the heels of a meeting which representatives of the paper industry, led by Jonathan Shaw MP, held with the new Energy Minister, Peter Hain on January 31. The Minister stated clearly at the meeting that the doubling of wholesale industrial gas prices over the last twelve months was an issue that the Government took very seriously and that industry could expect action sooner rather than later.
Alan McKendrick, President of the Paper Federation, and chief executive of Aylesford Newsprint, said:
“The news that the gas companies will at last be required to account for the magnitude of price increases over the last 12 months is very welcome indeed. The use of the Interconnector and how it impacts on prices is by no means transparent and if we are to be able to plan for our businesses we need answers to some very important questions.
”However it remains to be seen whether this is the only reason for the increases or whether other forces, such as market abuse have a role to play. This is why the Competition Commission must also investigate.”
Gas bills for the paper industry have increased by approximately 50 million over the last 12 months. A spokeswoman for the Paper Federation said that this has already caused job losses and if allowed to continue will threaten further jobs. “The price increases may also have consequences for planned investments in Combined Heat and Power (CHP) if they result in making this more environmentally effective means of energy provision uneconomic”, she added.
Register for free to comment