Wednesday, 20 Oct 2021

Not again! Toilet roll shortage fears as rising energy prices could trigger supply chaos

HGV shortages: 'Buy early for Christmas' advises expert

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In an attempt to protect the finances of companies, there have been cautionary measures taken to deal with any issues with finances that may arise. Companies are now reducing the amount of production they undertake of both toilet paper and food packaging.

The chief of the Confederation of Paper Industries has put forward the suggestion of “temporary winter cost-containment measure” in an attempt to deal with the sector costs going “through the roof”.

Both the toilet roll and food packaging industries are not the only ones to express concerns about the rise in energy prices.

The ceramics sector in the UK has also said that they will be forced into closing down a number of businesses across the country.

On Wednesday, energy prices reached a record high – but shortly fell back down after Vladimir Putin made a commitment to stabilising the market.

Andrew Large, director-general at the Confederation of Paper Industries, said that the members of this confederation are “affected very, very severely” by the rise in prices.

He told BBC Radio 4’s Today programme: “They’re seeing their costs go up through the roof.

“It’s damaging their profitability and in some cases, it’s causing them to manage their production rates so as not to expose themselves to the very, very highest costs.”

Mr Large called for a “temporary winter cost containment measure to try and put a lid on those costs so that these very, very important industries for British society are going to be able to continue to operate”.

Laura Cohen, chief executive of the British Ceramic Confederation, told the BBC are affecting firms all across the UK, including in the ceramics sector.

Ms Cohen said: “As the high pricing extends, more members are likely to be forced to stop production due to uneconomically higher energy costs.

“But we’re also concerned the prices reflect the market’s views about the physical availability of gas over the winter.

“In the event of national supply shortfall, our members are near the front of the queue to be forced off the gas network while households are last, and this can happen at very short notice.

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“A forced quick shutdown runs a very high risk of severe damage to brick kilns, which can be 100 metres long, operating over 1,000C, and that can threaten business viability.”

Research agency Cornwall Insight have warned that gas prices will continue to rise this year, with the cap on prices set to increase even further in the summer of next year.

Craig Lowrey, senior consultant at the firm, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap (£1,277 for a typical dual fuel direct debit customer) for winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation.”

In a statement to the BBC, Ofgem also acknowledged that times were difficult, meaning it would be “worrying times for people”.

The regulator added: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.

“However, if global gas prices remain high, then when we update the price cap unfortunately the level would increase.

“Any customer worried about paying their energy bill should contact their supplier to access the range of support available.”

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