Some 15 million households in England, Wales and Scotland could see a 12 per cent rise in their energy bills from October when the government-enforced energy price cap is increased.
This will undoubtedly cause hardship for many families but it should be compared to the global rise in gas prices of some 250 per cent since January.
The difference between these two figures is one reason why a number of smaller gas supply firms have stopped trading, although some appear to have failed to secure long-term price deals that would have provided them with a degree of insurance against sudden fluctuations in international markets.
The situation also prompted a US firm, CF Industries, which supplies much of the carbon dioxide used in food production and preservation, to halt production at two factories in England, causing alarm about potential shortages and the price rises in supermarkets. So the UK government’s swift intervention to ensure it resumes CO2 production is to be welcomed.
However, it may well be that further action is necessary to protect consumers, particularly the poorest, from the vagaries of a truly global market.
Rightly, UK Business Secretary Kwasi Kwarteng has ruled out government bailouts for failed energy companies, saying he did not think it was “the right thing for taxpayers' money to be injected into companies that have been badly run”. Instead, the government may lend money to larger firms to help them take on customers whose energy firm has collapsed.
Some may see this crisis as a reason why the UK should allow more oil and gas in British waters to be exploited despite the need to cut carbon emissions in the fight against climate change. The problem with this argument is that both are priced globally and the amount produced is unlikely to cause a significant difference.
Instead, the situation highlights the energy security benefits of renewables, as Kwarteng pointed out, saying that the sudden price rises showed the importance of plans “to build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels”.
It should be remembered that one of the world’s major gas suppliers, Vladimir Putin’s Russia, has form in abusing this position to gain political leverage, for example, by dramatically increasing prices and also cutting off supplies to Ukraine.
A number of MEPs have called for an investigation by the EU executive into Russian state gas firm, Gazprom, over suspicions it is deliberately manipulating the market by withholding supplies in order to pressure Germany into approving the controversial Nord Stream 2 gas pipeline.
The International Energy Agency has also said that it “believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season”. It added, diplomatically, that the crisis was an “opportunity for Russia to underscore its credentials as a reliable supplier to the European market”.
If the UK and the world were less reliant on gas, the power of Putin – ruled by a UK public inquiry to have “probably approved” the murder of Russian dissident Alexander Litvineno in London in 2006 and whose agents were almost certainly responsible for the 2018 Salisbury poisonings – would be diminished.
Developing a comprehensive portfolio of wind, tidal and solar renewable energy, backed by low-carbon nuclear, should free us from the market power of dictatorial regimes with appalling human rights records, while also reducing the greenhouse gas emissions that are causing climate change.
And because electricity is not an internationally traded commodity, Britain would acquire a considerable degree of insulation against the global impact of both cold winters and heatwaves that understandably cause energy spikes in faraway but heavily populated parts of the world.