Energy bill rise due to Iran war ‘inescapable’ amid warning of possible food and fuel shortages
Britain must prepare for possible food and fuel shortages due to escalating conflict in the Middle East, a minister has warned, as Keir Starmer prepares to hold a Cobra meeting to discuss plans to help households with rising bills.
Housing minister Steve Reed said the government was monitoring the situation “hour by hour” but there was no need for fuel rationing yet.
Meanwhile, Chris O’Shea, chief executive of Centrica, which owns British Gas, warned that a rise in energy bills could be “inevitable” if the war in the Middle East “stays as it is”.
Asked if the government had a plan to address oil and food shortages, he told Sky News: Sunday Morning with Trevor Phillips: “Of course, we need to be prepared for any possibility.”
But he added: “There is no need to ration fuel. People should go around and buy their fuel as they always have. If the situation changes, the government will look at what is needed in that situation.”
He later said that “the government will do whatever it takes” when it comes to spiraling energy bills due to rising oil and gas costs due to the conflict.
Mr O’Shea told the BBC that the impact on gas and therefore electricity bills from closing the Strait of Hormuz, a key shipping route, “should be lower than the impact on oil”. So my gut feeling is that you’ll see the impact more at the gas pumps than on bills.
He also backed the idea of targeted government support to help people with bills, which he described as “much better than general aid”, and called for more exploration in the North Sea to reduce energy prices.
It comes as Keir Starmer called on energy companies and oil retailers to impose a temporary profit cap to prevent the government from benefiting too much from the Iran war because of the tsar’s high cost of living.
Icelandic supermarket boss Lord Walker of Broxton has asked the government to examine capping profits during crises.
“As chief executive of a retailer, I have no problem with profit. It’s what allows businesses to invest, employ people and pay taxes. But I have a big problem with profiteering, especially when families are under real pressure,” Mr Walker said. Sunday Times.
He added: “I have asked the government to consider imposing a temporary profit cap to prevent manufacturers and retailers from taking advantage of the crisis to make windfall profits at the expense of consumers.”
Mr Walker, a former Conservative who became a Labor member last year, said oil retailers and energy producers had been summoned to Downing Street and warned that what he called “opportunistic rip-offs” would not be accepted.
He added that the Competition and Markets Authority (CMA), which attended the meeting, had “newly increased powers to intervene if necessary”.
He continued: “Pressure on regulators needs to be constant… If they are to do their jobs effectively, industries that profit from price gouging against the most vulnerable in society should take notice.”
There was an increase in global energy prices due to the impact of the conflicts in the Middle East.
The average household energy bill alone is predicted to rise by £332 in July, according to the latest forecast from Cornwall Insights, and experts have warned that further rises in petrol and diesel prices are inevitable following attacks on the region’s energy infrastructure.
Ministers will hold an emergency meeting with Bank of England Governor Andrew Bailey next week to discuss plans to help households with rising costs of living due to conflict.
But Rachel Reeves has been urged not to raise taxes in response to the economic shock of the US war with Iran.
