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UK energy import bill more than doubled to 117bn last year report shows

todayMarch 22, 2023 6

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UK energy import bill more than doubled to £117bn last year, report shows

The UK’s energy import bill more than doubled in a year to £117 billion, a report has found.

The Offshore Energies UK report (OEUK) has said this is the first time that annual UK energy import costs have broken the £100 billion barrier and it equates to £4,200 per UK household.

In 2022, the UK spent about £63 billion on crude oil, petrol, diesel, and other oil-based fuels, with another £49 billion spent on buying gas.

The rest was spent on imports of coal and electricity – making a total of £117 billion.

In 2021, £54 billion was spent on energy imports, with £48 billion spent in 2019.

The full OEUK Business Outlook report, which will be published on March 28, will warn UK consumers and businesses that they could face a similar import bill in the this year, as well as future years, particularly if the windfall tax imposed on UK oil and gas operators remains unmodified.

The report stated the large increase was driven partly by global price rises linked to the war in Ukraine but also by inflation and higher worldwide demand after the Covid pandemic.

The weakness of the UK economy and sterling was also a key factor because oil is valued in US dollars.

The pound was worth up to 1.40 US dollars in 2021 but is now hovering around 1.20 US dollars, meaning the pound now buys less.

The data from the report shows that energy imports from Norway alone went from £13 billion in 2019 to £41 billion in 2022. The UK is reliant on Norway for more than 30% of its gas.

The report highlighted the UK has been a “importer of energy since 2004”, consuming more energy than it can supply domestically and using other countries to “meet its energy needs”.

It stated being “reliant on other countries” leaves the UK “exposed” to disruptions in supply.

Ross Dornan, OEUK’s markets intelligence manager, who led the team that wrote this year’s Business Outlook report, said: “What these figures show is the risk and cost of relying on other countries for our energy security – and how far we are from reducing that reliance.

“About three quarters of the UK’s total energy comes from oil and gas – a proportion that has stayed constant for many years.

“We now rely on other countries for about half that supply, a proportion that will increase rapidly, especially if North Sea production is allowed to decline faster than UK consumption.

“The UK is on a three-decade journey to net zero and self-reliance but that needs long-term planning to reduce the demand for oil and gas.

“The UK has nearly 24 million homes heated by gas – which also fuels the power stations that provide 43% of our electricity.

“We also have 32 million cars fuelled by petrol and diesel. We can replace that infrastructure and those vehicles with low carbon alternatives, but it will take years during which we will still need oil and gas to keep our homes warm, keep the lights on and keep our roads moving.

“Our report argues that it will be better for our energy security, and for the economy, to get as much of that oil and gas from our own North Sea as we can – rather than import it.”

Published: by Radio NewsHub

Written by: Holiday Radio News Team

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todayMarch 22, 2023