The energy crisis, which started to be effective in the European economies on the eve of the winter season, when energy consumption will increase even more, started to reflect on the production sectors as well. The high rate of increase in prices brought bankruptcies in the energy sector, especially in England. The crisis, which directly affected fertilizer and meat production in the first stage, is expected to push food prices higher. The European Central Bank (ECB) and the Organization for Economic Cooperation and Development (OECD) warned that rapidly rising energy prices and bottlenecks in the supply chain will further escalate consumer inflation, which is at its peak in 10 years. The International Energy Agency (IEA) also called on Russia to increase gas supplies to Europe.
In the OECD Economic Outlook report released yesterday, the OECD predicted much stronger price increases than its previous forecasts in both 2021 and 2022. According to Morgan Stanley forecasts, higher energy prices will add 0.2 to 0.3 points to the Eurozone CPI data in the last three months. Expecting an average of 4.5% inflation in the last quarter across the G20, OECD states that 1.5 points of this will be due to freight and energy prices. In the report, which states that global GDP has returned to pre-pandemic times, it is predicted that rising commodity prices and freight will drive inflation even higher in the short term.
“We may see much more persistent inflationary pressure in the coming period, especially if price increases from energy costs increase higher wage pressures,” ECB VICE PRESIDENT Luis de Guindos said at an event in the Financial Times. Russia's slowing of the flow of natural gas to Europe and the fact that the stocks for the cold winter months have not yet been replenished, the hurricanes in the USA brought a significant share of the global supply to a standstill, and the strong demand that came with the full opening of most of the economies brought the energy prices to historical records in the continent, pushing the industrialists. started to push.
AT LEAST 4 ENERGY COMPANIES WILL BUILD IN THE WEEK
In England, the island country most affected by Europe's energy crisis, four small energy companies are expected to go bankrupt due to rising natural gas prices next week.
Sources told the BBC that these companies "bid to take over more than 1 million customers" to the big players in the industry. Industry sources predict that only 10 energy companies will remain by the end of the year in the country, which has 70 energy suppliers at the beginning of 2021.
THE WINNER OF THE CRISIS RUSSIAN FERTILIZER PRODUCERS
Two large fertilizer plants in the UK had found the solution to close their shutters after the indicator gas price rose above 70 Euros. VTB Capital analyst Elena Sakhnova says that the fact that the gas prices are fixed for 12 months for the industrialist in Russia provides a great advantage for Russian producers and that nitrogen fertilizer prices may return to their July peaks. While Russian fertilizer plants buy natural gas at $2/mmbtu, in Europe this figure is around $23/mmbtu.
MEAT MANUFACTURERS CANNOT FIND CARBONDIOXIDE
The closure of fertilizer manufacturers also reduces the supply of carbon dioxide used in the food industry, used in slaughtering animals and packaging food. Making a statement yesterday, British Minister of Trade, Energy and Clean Growth Kwasi Kwarteng said that meat producers have a serious problem in the supply of carbon dioxide and the next few days will be difficult. According to the news in Bloomberg, meat producers say they have “only a few days of carbon dioxide stocks and food supply chains that are already stuck with human resource constraints such as truck drivers are also in danger.”
"REMOVE GREEN ENERGY CHARGES FROM BILLS"
Michael Lewis, CEO of Eon UK, one of the UK's largest energy suppliers, called on the government to "remove green energy charges from consumers' electricity bills" to protect consumers from this harsh winter.
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