Britain Paying Dearly for Gas

Britain is currently paying some of the world's highest wholesale gas prices, rivalling those in energy-hungry Asia, Reuters reports.

The agency says the gas price is reflecting annual winter spikes for which government and industry offer no short-term solution. Recently some estimates found that the UK had only a few days' reserve of gas, after prolonged severe winter cold.

The Department of Energy and Climate Change (DECC) says the market is operating as normal. But on March 22 gas buyers faced prices up 50% from a day earlier.

"The UK gas market is functioning well and our gas needs are continuing to be met," was the DECC's official comment.

Yet spot prices are more than 70% higher than normal, at around $15.66 per million British thermal units (mmBtu) versus a long-term average of around $9 at the National Balancing Point gas hub.

That means Britain is paying almost as much as Japan pays for imports of liquefied natural gas (LNG) to power its highly industrialised economy.