Energy hike

UK plastics companies face average increases of 56% and 58% for electricity and gas prices, respectively, at the next renegotiation of their supply contracts.


According to a survey carried out by the British Plastics Federation (BPF), plastics companies face average increases of 56% and 58% for electricity and gas prices, respectively, at the next renegotiation of their supply contracts.


This is the headline conclusion of a BPF energy costs survey of a representative sample of 25 member companies from across the plastics sector, including material and additives suppliers and processors, and which involved the Flexible Packaging Association (FPA).


For electricity, increases at the next expected or actual renegotiation ranged from 23% to 100%, with an average increase of 56%.


For gas, increases at the next expected or actual renegotiation ranged from 10% to 100%, with an average increase of 58%.


The average increases facing companies on renegotiation are far higher than those recorded when contracts were last agreed. For gas, the average 36% increase leapt more than one and a half times, and for electricity the average 33% increase jumped nearly one and three quarter times.


The BPF has already warned its members of a difficult winter ahead, when consistency of supply is likely to be questionable in addition to the onset of elevated energy price levels.


Pointing to persistently high oil prices which have clearly made their mark on energy costs for all manufacturing, the BPF and FPA note that the UK is becoming a net importer of energy. North Sea gas production is dwindling at a time when new pipelines to import gas from Norway and Russia are still under construction.