Britain may give state loans to energy companies as gas prices surge

Britain may give state loans to energy companies as gas prices surge
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Updated 21 September 2021

Britain may give state loans to energy companies as gas prices surge

Britain may give state loans to energy companies as gas prices surge
  • The record prices have strained the British energy sector, destroying the business model of smaller energy traders and sending shockwaves through the chemical and fertiliser markets
  • Britain's biggest energy companies have asked the government for support to help cover the cost of taking on customers from firms that have gone bust

Britain is considering offering state loans to energy companies that take on customers from firms which go bust due to soaring wholesale natural gas prices, Business Secretary Kwasi Kwarteng said on Tuesday.


Wholesale natural gas prices in Europe have soared this year, pushed up by high demand for liquefied natural gas in Asia, nuclear maintenance and lower-than-usual supplies from Russia.


The record prices have strained the British energy sector, destroying the business model of smaller energy traders and sending shockwaves through the chemical and fertiliser markets, leading to a shortage of carbon dioxide.


Britain's biggest energy companies have asked the government for support to help cover the cost of taking on customers from firms that have gone bust.


Kwarteng told Sky News when asked about state-backed loans that, "there are lots of options."


"It costs a company to absorb up to hundreds of thousands of customers from another company that's failed and there may well be a provision for some sort of loan and that's been discussed," he added.


Kwarteng said that in an average year about 5-8 smaller energy companies exited the market in Britain, but that this year the number could be bigger.


Britain could also look at providing some kind of economic support for the U.S. company that provides 60 percent of its carbon dioxide, CF Industries, Kwarteng said.

WINTER HEATING BILLS
European consumers are facing the prospect of soaring winter heating bills due to a confluence of global factors that have raised questions about how vulnerable Europe remains to swings in global energy prices.


Benchmark European gas prices have risen by more than 250 percent since January, with contributory factors also including low storage stocks, high EU carbon prices and low renewable energy output.


Britain privatised British Gas in 1986 and, after a series of deregulating steps since then, the consumer market has seen a plethora of different companies - some essentially just traders - offering gas and electricity to households.


"I don't think we should be throwing taxpayers' money at companies which have been, let's face it, badly run," Kwarteng said. "I don't want there to be a reward for failure," he added.


Kwarteng said he also hoped to have some resolution to a shortage of carbon dioxide, which is used to put the fizz in beer and soft drinks, and also used to stun pigs and poultry in abattoirs as well as to preserve the shelf-life of meat.


"Its pretty imminent but I'm confident, this week I hope we have a very clear plan to get CO2 production going again," he said, adding that he had spoken to finance minister Rishi Sunak about the situation.


CF Industries has halted its operations at two plants in Britain that produce CO2 as a byproduct of its main business, producing fertiliser. Kwarteng met Tony Will, the head of CF, on Sunday.

 


Apple to sell fewer iPhones as chip crisis bites, J.P.Morgan says

Apple to sell fewer iPhones as chip crisis bites, J.P.Morgan says
Image: Shutterstock
Updated 9 sec ago

Apple to sell fewer iPhones as chip crisis bites, J.P.Morgan says

Apple to sell fewer iPhones as chip crisis bites, J.P.Morgan says
  • The brokerage trimmed its iPhone revenue estimate to $63 billion for the first quarter of fiscal 2022

 J.P.Morgan on Tuesday became the second brokerage in two weeks to cut its forecast for Apple Inc's iPhone sales for the crucial holiday quarter as the global chip shortage and factory closures in Asia finally catch up to the technology giant.


The brokerage trimmed its iPhone revenue estimate to $63 billion for the first quarter of fiscal 2022, which would be a yearly fall of nearly 4 percent, analyst Samik Chatterjee said in a note to clients.


Last week, Needham said it expected iPhone 13 shipments to total 80 million units in the first quarter and cut its estimates for the holiday quarter by 10 million units citing supply chain issues including the chip shortage.


For the fourth quarter, JPM expects iPhones to bring in revenue of $46 billion after selling 58 million units, marginally higher than Wall Street's forecast of $41 billion.


According to Refinitiv IBES, analysts are expecting about 45 million units for the holiday quarter and 79.4 million units in the first quarter.


While Apple has weathered the supply crunch better than many other companies due to its massive purchasing power and long-term supply agreements with chip vendors, supply chain bottlenecks and lockdown in some countries are hampering its production timelines.


Bloomberg News reported last week that the Cupertino, California-based company is likely to slash production of its iPhone 13 by as many as 10 million units due to the global chip shortage.


Customers wanting an iPhone 13 are already having their patience tested with one of the longest wait times for the phone in recent years, analysts said.


"We continue to see strong demand for iPhone 13 and 5G iPhone SE relative to low investor expectations to act as a catalyst, the timing of realization of which, although delayed on account of supply headwinds, is unchanged in magnitude," Chatterjee said.


However, Apple said on Monday that its two new MacBook Pro models, that run on more powerful in-house chips, and new AirPods 3, will start shipping next week.


Apple's announcement of hardware innovations for the holiday season despite the chip shortage showed the company was flexing its supply chain muscles, Wedbush analyst Daniel Ives said.


Russia to go after Google this month with fine of up to 20% of annual turnover

Russia to go after Google this month with fine of up to 20% of annual turnover
Image: Shutterstock
Updated 6 min 57 sec ago

Russia to go after Google this month with fine of up to 20% of annual turnover

Russia to go after Google this month with fine of up to 20% of annual turnover
  • Russia has ramped up pressure on foreign tech companies as it seeks to assert greater control over the internet in the country

Russia said on Tuesday it would this month seek to fine U.S. tech giant Google a percentage of its annual Russian turnover for repeatedly failing to delete content deemed illegal, Moscow's strongest effort yet to rein in foreign tech firms.

Communications regulator Roskomnadzor said Google had failed to pay 32.5 million roubles ($458,100) in penalties levied so far this year and that it would now seek a fine of 5-20 percent of Google's Russian turnover, which could reach as much as $240 million, a significant increase.


Google did not immediately respond to a request for comment.


Russia has ramped up pressure on foreign tech companies as it seeks to assert greater control over the internet in the country, slowing down the speed of Twitter since March and routinely fining others for content violations.

Opposition activists have accused Alphabet's Google and Apple of caving to Kremlin pressure after they removed an anti-government tactical voting app from their stores.

Roskomnadzor earlier in October said it would ask a court to impose a turnover fine on social media firm Facebook, citing legislation signed by President Vladimir Putin in December 2020.

"A similar case will be put together in October against Google," Roskomnadzor said in emailed comments to Reuters on Tuesday, noting that the company also owned video-hosting site YouTube.

The SPARK business database showed that Google's turnover in Russia in 2020 was 85.5 billion roubles. A 5-20% fine would amount to between 4.3 and 17.1 billion roubles.

Google is currently fighting a court ruling demanding it unblock the YouTube account of a sanctioned Russian businessman or face a compounding fine on its overall turnover that would double every week and force Google out of business within months if paid.

 


‘Saudization’ plan rolled out in key areas in Al-Baha region of the Kingdom 

‘Saudization’ plan rolled out in key areas in Al-Baha region of the Kingdom 
Updated 28 min 22 sec ago

‘Saudization’ plan rolled out in key areas in Al-Baha region of the Kingdom 

‘Saudization’ plan rolled out in key areas in Al-Baha region of the Kingdom 

Riyadh: Sales outlets in the Al-Baha region will be required to only employ Saudi citizens, under plans announced by the Minister of Human Resources.

The move will come into action on January 14 2022, as a part of the country’s ‘Saudization’ plan, and will see 10 other sectors in the area also required to abide by the scheme. 

These include electrical appliances, plastic materials, soap and detergents, water, food and beverages. 

The announcement excluded professions of cleaning, loading/unloading, and driving.

Cafes will also have a 'Saudization' quota of 50 percent, while restaurants will have a target of 40 percent.

This comes following the recent announcement by the Crown Prince on Sunday, to launch strategic offices to drive development in three key regions of Al-Baha, Al-Jouf, and Jazan.


Permian Basin oil output up to near pre-pandemic level: Bloomberg

Permian Basin oil output up to near pre-pandemic level: Bloomberg
Updated 36 min 44 sec ago

Permian Basin oil output up to near pre-pandemic level: Bloomberg

Permian Basin oil output up to near pre-pandemic level: Bloomberg

RIYADH: The Permian Basin of West Texas and New Mexico is increasing its oil output to an average 4.826 million barrels a day in October, Bloomberg reported citing a US government report on Monday.

The output in the most prolific shale patch in America is near to its pre-pandemic levels of 4.913 million bpd recorded in March 2020.

Production rose as benchmark US crude prices, which is at seven year high, underpinned by a severe supply deficit.


Mideast economy recovering but social unrest on the rise: IMF

Mideast economy recovering but social unrest on the rise: IMF
A member of Lebanon's Hezbollah movement fires his gun during the funeral of some of their members who were killed during clashes in the capital Beirut's southern suburbs on October 15, 2021. (AFP via Getty Images)
Updated 19 October 2021

Mideast economy recovering but social unrest on the rise: IMF

Mideast economy recovering but social unrest on the rise: IMF
  • "The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance"

The Middle East and North Africa is on track to economic recovery, but rising social unrest and unemployment are threatening to hinder "progress", the International Monetary Fund said Tuesday.


The MENA region, which includes the Arab countries and Iran, saw its real GDP growth shrink by 3.1 percent in 2020 due to lower oil prices and sweeping lockdowns to prevent the spread of the coronavirus.


But with rapid vaccination campaigns, particularly in the Gulf nations, the IMF predicted that GDP growth would rise to 4.1 percent this year, a slight upgrade of 0.1 percent from the last projection in April.


"The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance," Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told AFP in an interview.


But "this recovery is not the same in all countries. It is uncertain and uneven because of the divergence in vaccination... and geopolitical developments", Azour added.


The IMF said this month that while prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries are witnessing "fragile" recoveries.


It warned of "a rise in social unrest" in 2021 that "could pick up further due to repeated infection waves, dire economic conditions, high unemployment and food prices".


Unemployment rates increased in MENA last year by 1.4 percent to reach 11.6 percent.


This rise exceeds that seen during the global financial crisis and the 2014-15 oil price shock, the IMF said.


The fund also warned of the longer-term risk of the uneven recovery, which could lead to a "permanent widening of existing wealth, income, and social gaps and, ultimately, weaker growth and less inclusive societies".


About seven million more people in the region are estimated to have entered extreme poverty during 2020-21 compared to pre-crisis projections, according to the IMF.


In Lebanon, the continuing drop in the value of the currency has dashed hopes that the government formed last month can stem an economic crisis, branded by the World Bank as one of the worst since the mid-19th century.


Nearly 80 percent of the Lebanese population lives below the poverty line.


"The Fund has already started technical discussions with the authorities... to develop what would be in fact that the framework within which the fund can help Lebanon," said Azour, a former Lebanese finance minister.