The Department for Business expects to urge Prime Minister Boris Johnson’s backing for a package to assist energy-intensive industries as gas costs soar, the BBC understands.

On Monday, Business Secretary Kwasi Kwarteng asked the Treasury to support corporations hit by rising energy prices.

The proposals may involve loans price many a lot of pounds.

The Treasury is claimed to be still analysing the proposal, whereas variety ten has declined to comment.

Other corporations have same they’ll be forced to close up their factories if the rising value of gas and electricity makes it uneconomical for them to supply their merchandise.

There ar fears in government that while not intervention, factories may shut and tens of thousands of jobs may be below threat as high energy prices bite, says BBC political correspondent Nick Eardley.

The formal proposal by adult male Kwarteng follows days of conversations with leaders from affected industries, also as a awfully public row with the Treasury concerning the standing of talks between the departments.

There is reluctance to shore firms which might unremarkably be competitive, therefore a support package is probably going to involve loans instead of grants, our correspondent says.

Why ar gas costs therefore high?

Is the United Kingdom headed for a gas shortage this winter?

Demands for support from energy-intensive industries are growing louder, however not all firms are affected within the same means.

Some have long contracts to shop for energy at mounted costs, protective them from short-run will increase, however others don’t.

Businesses themselves have drawn up their energy prices to be capped, within the same means that households presently enjoy a value cap obligatory by regulator Ofcom.

But that will risk merely passing on the additional prices to energy suppliers, says our correspondent.

Direct subsidies would raise the burden on taxpayers, at a time once Chancellor Rishi Sunak is predicted to hunt to curb public disbursal in his next Budget on twenty seven Oct.

Why ar gas costs therefore high?

There ar several reasons, each within the UK and round the world.

There’s been a shortage of gas and energy in several countries as they emerged from imprisonment and trade reopened.

A cold winter in Europe last year additionally place pressure on provides and, as a result, less gas is being keep than traditional.

On high of that, the united kingdom has fewer gas storage facilities than some countries – that means it buys a lot of on the wholesale market and is exposed to sharp value rises.

There’s additionally redoubled demand from Asia (which additionally suffered a chilly winter) for liquefied gas. And there’s a suspicion that Russia, a significant gas provider, is proscribing output – AN accusation it denies – that, following the law of provide and demand, has fuelled value rises.

This has helped push up gas costs within the United Kingdom, Europe and Asia. Since January, they’ve risen 250%. and costs have soared seventieth since August alone.


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