COMMODITIES(B-Trams):The Uk and Uk’s Offshore Energies import bill surge to £117 billion ($127.12 billion), ratio is more then double of the total of £54 billion ($58.67 billion) in 2021.
The UK’s annual energy import costs are the first to surpass £100 billion for the first time. The Business Outlook Report from OEUK, which will be out on March 28, will warn that UK consumers and businesses could face similar import bills this year and in the future, particularly if the windfall tax on UK oil and gas operators stays the same.
The findings come as MPs prepare for a Commons debate on the UK’s “energy trilemma,” which refers to the balance between energy security, costs, and environmental impacts. The cost for each UK household is £4,200 (or 4,563).
According to the OEUK report, the rise to £117 billion (127.12 billion) was cause by inflation and increase global demand following the pandemic, in addition to global price increases caused by the Ukraine conflict.
Because oil is value in U.S. dollars, sterling’s weakness and the UK economy were also important factors. In 2021, the pound was worth up to $1.40, but it is now worth about $1.20, so each pound is worth less.
The United Kingdom spent approximately £63 billion (68.45 billion) in 2022 on crude oil, gasoline, diesel, and other oil-based fuels, and another £49 billion (S53.24 billion) on gas purchases. The remaining £117 billion used to purchase electricity and coal imports.
The latest data on the gross cost of commodity imports, which was recently released by the Office for National Statistics (ONS) of the UK government, was used to compile the figures. According to the ONS data, energy imports from Norway alone increased from £13 billion in 2019 to £41 billion in 2022. More than 30% of the gas that the UK uses comes from Norway at the moment.
The UK’s energy security and economy will jeopardized if the country continues to rely on imports, according to the OEUK report, which will warn that similar bills could be incurred in this and subsequent years.
Additionally, it will demonstrate to policymakers that the UK’s North Sea should regarded as the foundation of the nation’s energy security in a world where imported energy supplies are becoming increasingly susceptible to supply and price shocks worldwide. This means primarily oil and gas at the moment, but expanding offshore wind and other low-carbon resources in the future. According to the report, “The UK has been a net importer of energy since 2004,” which means that the nation requires more energy from other nations to meet its needs.
The UK is expose to supply disruptions and market volatility because it is so dependent on other nations for its energy. For instance, the total cost of importing fuel doubled last year, reaching £117 billion.
The UK’s North Sea still has oil and gas reserves equivalent to 15 billion barrels of oil, according to the report. This is enough to meet the country’s needs for three decades while it builds offshore wind and other low-carbon energy systems that will power the future.
“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,” stated Ross Dornan, OEUK’s markets intelligence manager, who led the team that wrote this year’s Business Outlook report. Around 3/4 of the UK’s complete energy comes from oil and gas – an extent that has remained consistent for a long time.
We currently rely on other nations for approximately half of that supply, and this proportion will rapidly rise if North Sea production is allow to decline faster than UK consumption. The UK is on a three-decade excursion to net zero and independence however that needs long haul wanting to lessen the interest for oil and gas.
Nearly 24 million homes in the UK are heated by gas, which also powers the power plants that generate 43% of our electricity. Additionally, 32 million automobiles run on gasoline or diesel. We can supplant that foundation and those vehicles with low carbon choices, yet it will require a long time during which we will in any case require oil and gas to keep our homes warm, keep the lights on and keep our streets moving.
“Our report argues that getting as much of that oil and gas from our own North Sea as we can – rather than import it – will be better for our energy security and for the economy,”
Read More: Grain Deal Between Russia & Ukraine Extends
“The windfall tax levied last year, now means UK offshore oil and gas operators are paying a total tax rate of 75%, -one of the highest rates in the world and over three times the rate of conventional UK businesses,” stated David Whitehouse, chief executive of OEUK. Investment is discourage and our businesses, jobs, and communities are harm by this level of taxation.
“As our Business Outlook report will demonstrate, numerous offshore operators have already reduced their investments in the North Sea as a result of those taxes. As a result, we will see a decrease in oil and gas production, a decrease in skilled labor, and an increase in imports to compensate for the loss of production.
“Practically 40% of our homegrown and modern energy needs are met by gaseous petrol, and the North Ocean bowl and more extensive UK Mainland Rack gives near portion of that aggregate. We are not reliant on Russian gas imports except for this essential resource and our offshore workforce.
“We have experience a period of extreme price volatility as a result of the war in Ukraine; however, when prices fall, the windfall tax ought to be eliminate. Our own great British energy industry is dependent on the return to a tax system that is fair, balanced, and predictable as well as the continued issuance of exploration licenses for its future.
Otherwise, energy import bills exceeding £100 billion will become commonplace; this amounts to money leaving homes and businesses in the UK to support the economies, industries, and jobs of other nations. It will only make things worse for everyone in the UK. We clearly can’t permit that.”