5 October 2022

On 28 August 2022 Dmitry Medvedev said the spot price of gas to Europe would be €5 per cubic metre by the end of the year.

A cubic metre of natural gas is equivalent to 10.28 Kwh. Conversion values here

€5 per cubic metre is 48.6c per Kwh.

If there is a 42% increase when converting the international spot price of gas to wholesale electricity and a 45% increase from wholesale to retail the price would be €1.00 per Kwh.

Many people in Britain heat their homes with natural gas. Britain has been importing less gas from Russia than EU nations. An international spot price for gas of €5 per cu metre, at the current exchange rate of 86p to the euro would result in gas in Britain being £4.32 per
cu metre.

Applying the above increases for retail supplies, the prices in Britain would be 61p per Kwh for gas and 85p per Kwh for electricity.

A spreadsheet shows these figures. Here

The UK government is applying subsidies to limit the price of gas and electricity for both commercial and domestic consumers.

The application of these subsidies is a political decision. The UK and European nations are in economic collapse. Without subsidies the costs of gas and electricity would be too expensive for commercial and domestic consumers. The subsidies are being made to prevent public revolt.

The subsidies mask the prices of the gas and electricity at the point of use. The subsidies require vast amounts of funding. There are no funds to pay subsidies. The ONS reports that by the end of July 2022 the UK government borrowing was the equivalent of 99.6% of GDP.

To pay the subsidies the UK government is printing £5 billion every day. Specifically, the Bank of England is buying £5 billion in government bonds every day. This will cause debasement that the public will experience as prices rising on all products and services.

The subsidies are not an economic bridge to a sound economy.

Printing currency causes each existing unit of currency, both tangible and digital, to become worth proportionately less. The pie does not get bigger, the slices get smaller.

The government is not telling the electorate that the price of gas and electricity is a direct consequence of their political decisions and they will not tell the electorate that the subsidies will not provide an economic solution or that the subsidies are causing the debasement that is causing prices for all products and services to rise.

In the coming months the UK will have less industry, be less able to pay for gas, electricity or interest on its debt, the volume of stored gas may have been reduced, the balance of debt to GDP will be greater and the international spot price of gas is likely to be higher, perhaps €5 per cubic metre.

On 3 October 2022 sterling had been debased by 22.4% since 1 Jan 2020. The pound and everything denominated in it are on a trajectory towards losing much of their value. The UK government is likely to do as all governments do when their fiat currencies collapse, it will print more currency thereby causing still more debasement.

The economy has hit the iceberg.

The decision by the UK to stop buying inexpensive, abundant and reliable Russian gas was political, one of alignment with US policies, despite this causing harm to Britain. The British do not benefit by supporting US strategies to destroy the Russian economy. Russia has done nothing to harm Britain.

The UK government's North Sea Transition mission statement, here, implies that there are substantial reserves in the North Sea and rather than ensuring they are available to maintain British industry and keep people warm, that government are following the WEF's Great Reset and UN's Agenda 2030, the carbon fiction and are committed to a net zero policy.

The British are accomplices in the destruction of their own industries, economy and standard of living both by refusing to buy Russian gas, oil and coal and decommissioning their North Sea fields.

Links

Duran: Britain in economic and political crisis. 5 Oct 2022. Play

Larry Johnson: US, UK and EU suffer for their proxy war on Russia. Here

On 27 Sept 2022 gas in Europe reached €1.95 per Kwh. Source

Report: Average cost of electricity per kWh in the UK 2022. Here

Further increases in 2023 are expected. Here

Average gas and electricity bills in the UK. Here

Gas and electricity domestic use in UK. Here

Volume of stored gas in UK. Here

Electricity prices in the EU. Here

German bakery owner devastated as gas bill soars by 1,200%. 21 Sept 2022. Article

Electricity in EU and UK will cost ten times as much in 2023. 15 Sept 2022. Article

Post office in Ireland gets fuel bill of €9,837 for one month. 30 August 2022. Item