Energy minister Greg Hands has said that the UK’s move toward cleaner and greener energy production is now an “issue of national security” as well as cutting down on the nation’s carbon output.
While conceding that the move toward greener energy production was likely to be a time consuming measure and more domestic fossil fuel production would be required in the interim, Hands said that the move would be necessary to make the country more energy independent and decrease its reliance on energy purchased from abroad.
Hands said: “By switching to cheaper power generated in the UK, for the UK, we will ensure that we're not dependent on any unfriendly foreign country to keep our homes warm and lit.”
Hands’ comments came after Russia’s military offensive in Ukraine raised concerns in the West about energy independence and where countries source their energy from.
The Russian assault on its neighbour brought major repercussions for the global fuel marketplace with wholesale oil prices increasing sharply across the globe.
Russia is the world’s third largest exporter of oil, and the US and Canada’s decision to embargo Russian oil in response to its invasion of Ukraine has led to increased demand for oil from other producing countries, which has pushed prices up worldwide.
While the UK’s energy dependence on Russia is minimal, importing just six per cent of its oil from the country, UK consumers have still been hit by global price hikes. Westminster has also made clear that the UK will cease importing any fuel from Russia by the end of 2022.
However, UK motoring bodies are optimistic that petrol prices will begin to stabilise after hitting record levels, with the recent easing of wholesale costs of fuel and oil.
With European Union countries being more energy dependent on Russia than some of their Western counterparts, the bloc has opted not to follow suit with the US and Canada on a Russian oil embargo, meaning wholesale prices have begun to cool. This has also been helped by reports that other oil producing countries such as Iran, Venezuela and the United Arab Emirates could increase production to guarantee additional supply.
The average price for a litre of petrol rose above £1.60 for the first time last week, peaking at £1.63 per litre on Sunday while diesel stood at £1.73 per litre. Yet, the AA has said that these should begin to subside unless global oil prices soar once again.
After hitting a 14-year high recently, the price of a barrel of Brent crude oil - often referred to as the global oil price benchmark - dropped by three per cent early on Monday to $109 per barrel.
The drop in price prompted the RAC to suggest that drivers “should soon get some respite” at the pump now that “oil and wholesale prices appear to have settled”.
Simon Williams, fuel spokesman at the RAC, said: “The price hikes seen over the weekend are still a result of the oil price rise which began at the start of the month and peaked early last week at $137 a barrel.
“As the oil price has now fallen back, we should hopefully reach the peak and start to see prices going the other way to reflect the big drop in wholesale costs seen at the end of last week, subject to no further spikes in the barrel price this week.”
Yet, high petrol prices are likely to remain in place in the short-term, with some retailers throwing caution to the wind in case wholesale costs suddenly increase once more. There is also the impact of a time lag to be factored in between when vendors buy fuel at a particular price and then sell their supply on to consumers.
Downing Street has this week confirmed that the government will open talks with Saudi Arabia on how to diversify energy supply in the wake of the market disruption sparked by Russia's assault on Ukraine.
Photo by Jay Skyler on Unsplash
