Energy Prices In Europe Spiking

The energy crisis that is taking hold more deeply across Europe is already leading to unprecedented electricity costs for residents, industrial users, and businesses of all sizes.

Newsmax reported Monday on the situation faced by The Rose and Crown as an example. That local pub in Bebington, England, posted a tweet on Saturday detailing its upcoming annual electricity bill of around £62,000, or $72,000.

It said that it was paying 15 pence per kilowatt-hour in May and the best rate available now is more than 97 pence per kilowatt-hour. At current conversion rates, that is about $1.14 per kilowatt-hour.

British energy regulator Ofgem recently announced the electricity price cap for household accounts would be going up by 80% beginning in October.

Manchester economic advisor Sacha Lord said that the U.K. government’s “lack of intervention, will now cause more damage to Hospitality, than the pandemic.” Lord added that even though regulators can see what’s coming, “they chose to go on holiday,” describing the government’s oversight failures as “utterly insulting.”

Lord added that unless there is immediate action by the British government, there will be “closures like never before in our lifetime.”

Even before the Russian invasion of Ukraine began in February, wholesale prices for natural gas across Europe were on the way up because of renewed demand following the COVID-19 pandemic. Now that the war in Ukraine has led to stiff economic sanctions on Russia and interruptions in gas supplies, energy prices are truly surging.

Western European nations are now struggling to replace energy that had been coming from Russia through the Nord Stream pipeline and other transportation routes.

Shell CEO Ben van Beurden has recently warned that European nations are likely to be forced into rationing access to energy for several years, predicting the current crisis will last longer than just the upcoming winter.

He added that a future without access to natural gas from Russia will test the “solidarity” among the member countries of the European Union. Cooperation is likely going to be needed to keep many key industries operational.

He added that the belief that the crisis will be over after this winter is a “fantasy that we should put aside.”