Pubs Could Be Hit With Huge Energy Bill Hike Due To Russia Sanctions
2 min read
Ministers are faced with the challenge of helping thousands of hospitality businesses find new energy suppliers after hitting Russian gas giant Gazprom with sanctions.
Around 20% of the UK's pubs and restaurants are supplied by Russian gas giant Gazprom and the Department for Business, Energy and Industrial Strategy (BEIS) has identified the impact on the industry as a consequence of the sanctions against Russia, a government source told PoliticsHome.
The government is looking at how it can assist hospitality businesses in finding new energy suppliers as more effects on British people and businesses of Russia's attack on Ukraine continue to emerge.
Kate Nicholls, CEO of UKHospitality, said hospitality businesses are "being forced to change supplier at the worst possible time and facing some of the worst market conditions”.
She said many will have to enter insecure contracts with more costly terms, while "in a very small number of cases" some businesses may not be able to a new supplier and will be forced to close.
“Those businesses that are coming out of contracts because of sanctions on Gazprom are now phoning around making sure they can get an alternative supply," she told PoliticsHome.
Since the coronavirus pandemic, energy suppliers have generally been reluctant to enter new contracts due to economic uncertainty, Nicholls said, adding that in recent days she had heard cases of suppliers asking hospitality firms to pay "very large" deposits in order to sign up.
“Anything the government can do to use their good influence to encourage energy providers to take a reasonable approach and enter new contracts would be very welcome," she said.
A spokesperson for BEIS said businesses "should exercise their own commercial judgement with regards to energy supply contracts they have in place".
Gazprom, one of the world's largest energy companies, has been hit with several sanctions as part of the government's response to Vladimir Putin's invasion of Ukraine.
Gazprom can no longer issue debt or equity in the UK while CEO Alexei Miller, who according to the government is one of the most important executives backing Putin, was today added to the UK's list of sanctioned oligarchs, along with Chelsea FC owner Roman Abramaovic and five others. He can neither travel to the UK nor do business with any individual or business here.
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