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Gas shortages may affect UK fine chemical industry

By Kirsty Barnes, 21-Dec-2005

Related topics: Regulatory & Safety

Fine chemical and pharmaceutical intermediate manufacturers may be affected by supply disruptions due to ongoing UK shortages of natural gas. Price spikes in gas are becoming both higher and more frequent in the UK.

The trade group representing the chemical industry has warned the escalating gas prices are forcing many chemical manufacturers to reduce or suspend production, while others have transferred production to sites outside the UK.

The >Chemical Industries Association (CIA) believes sustainability of the chemical industry is being undermined by the problems in the UK's energy market and says the security of UK energy supplies is vital to industry.

 

The organization points out that the UK does not have a properly functioning forward gas market. Problems include uncertain gas supply and the high prices caused by dependence of the liberalised UK market on the largely regulated European one.

 

CIA believes it is imperative for the Government to keep a close watch on the energy market and take effective action to ensure that all supplies are maximised, existing UK storage is fully replenished in summer, and that there is a steady inflow of gas to the UK during peak winter demand.

 

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