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Britain is set to buy £2 bln of gas from Russia in 2022 despite sanctions

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Britain is still on course to bolster the Kremlin’s coffers with £2 billion-a-year for imported Russian Liquefied Natural Gas (LPG) as Brent crude oil today topped $119 per barrel, is now up almost 20 percent on the week and is expected to rise even higher because of the war in Ukraine.

UK imports of Russian gas have doubled since 2018 and despite a ban on Russian-owned ships docking in British ports two carrying it are due to arrive at the Isle of Grain in Kent this weekend, according to Unison.

Russia supplies around 30 per of Europe’s gas and oil – and one in ten barrels of the world’s oil – and the UK has become increasingly reliant on it.

Around 33 shipments from Russia arrive in the UK per year, mostly from the Yamal peninsula in the Arctic Circle. But it appears that there has been a change in tactic, with fuel changed on to non-Russian ships in Europe before continuing their journey to avoid sanctions.

Alex Froley, an analyst at Icis, said: “If Russian-controlled ships can still land in continental Europe, companies may be able to swap schedules around to avoid a significant change in overall supplies to Europe.”

Labour MP Darren Jones,  chairman of the Commons business and energy select committee, told The Times: “Ministers must urgently map our exposure to Russian energy . . . and then set out what action will be taken to reduce that exposure to zero. We should do this in partnership with European allies and collaborate on a Europe-wide resilience package that cuts off Russian energy dependence as quickly as possible.”

Globally Brent crude topped $119 per barrel and is now up 20 percent on the week, while everything from coal to natural gas and aluminium are on fire as Western nations tighten sanctions on Russia.

The rising cost of buying oil and gas is good news for Putin as it was revealed the West is still paying Russia more than $1billion-a-day for fossil fuels, an amount that is only going to rise, analysts predict.

Russia can use this daily cash injection to subsidise the $15 billion-a-day invasion of Ukraine as his troops remain bogged down after hitting fierce resistance from Volodymyr Zelensky’s heroes.

“Russia supplies around 30 percent of Europe’s gas and oil imports and accounts for around 11 percent of world oil production,” said Shane Oliver, head of investment strategy at fund manager AMP. “In short, investors are worried about a stagflationary shock.”

Russia’s invasion of Ukraine has catapulted the price of gas and oil upwards to record levels with British households warned that they could soon be paying more than £3,000-a-year to heat their homes.

On Wednesday UK wholesale gas prices – the price paid by energy companies – briefly topped £4.50 per therm – up from £2.50 Wednesday morning. It then settled at around £4 – more than ten times the level a year ago when it was around 35p.

READ ALSO: ‘The world is not at war with Russia, just Putin’ ~French President

Britain imports around four per cent of our gas from Russia in liquid form. Market analysts say that the spike is in part due to uncertainty caused by the Government’s decision to ban Russian ships from UK ports.

Experts say that if it remains at this price, household gas bills for millions of Britons already squeezed by the cost of living crisis will be in excess of £280-a-month or through £3,000-a-year by the autumn.

The Government’s price cap will go up by £693 on April 1 to £1,970 – but analysts from Cornwall Insight are forecasting an Autumn price cap at £2,497 a year versus – a further rise of £500 in October – even before today’s record price.

Joe Malinowski, founder of TheEnergyShop, has said: “Depending upon how the situation unfolds, gas prices could literally go anywhere.

“We are not as reliant on Russia for security of gas supply as Europe, but the price we pay is linked to gas prices on the Continent.

“The best we can hope for is that wholesale gas prices don’t go up much more. All other scenarios are varying degrees of bad.”

The cost of a barrel of oil briefly hit $113-a-barrel today before settling at $111 this morning, the highest price for more than seven years that is expected to force the price of petrol and diesel over £2-a-litre.

Fuel prices have hit a new record high as the cost of oil soars due to Russia’s invasion of Ukraine.

Figures show the average cost of a litre of petrol at UK forecourts was 151.67p on Tuesday, up from 151.16p on Monday.

Meanwhile, the average cost of a litre of diesel is also at a record high, reaching 155.23p, according to data firm Experian Catalist.

It means an average 55 litre petrol tank – used in cars such as a Ford Focus of VW Golf – will now cost £83 to fill up.

Motoring groups fear prices could increase further, with some even warning of 180p litre prices ‘within months’.

RAC fuel spokesman Simon Williams warned said: ‘The sudden 10 US dollars (£7.50) jump in the oil price on Tuesday to 113 US dollars (£85) a barrel is likely to take the average price of petrol towards 155p a litre and diesel to 160p, particularly as it’s looking like this price isn’t just a market blip caused by the US and allies deciding to dip into the strategic oil reserve.

“If oil does stay at this level, the journey to an average unleaded price of 155p may be far too quick.”

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