LONDON: The British government is negotiating with Qatar and Norway to secure new long-term gas contracts amid crippling energy shortages, the Times of London reported.
Business Secretary Jacob Rees-Mogg is reportedly negotiating deals that would see Britain required to purchase a significant quantity of gas products at a set price over at least the next decade, which could put Britain at risk of overpaying if the market suddenly changes.
Prime Minister Liz Truss is reportedly in favor of the deal, which would secure long-term energy sources and cut down the cost of the government’s plan to spend tens of billions on energy bills this winter.
Senior civil servants are reportedly more hesitant, with figures in the Treasury warning that Britain would be stuck with higher prices if the cost of gas more generally dips after the current hike, which is being exacerbated by the war in Ukraine.
“There are a lot of concerns about this,” a civil servant source told The Times. “The prime minister is completely behind it but others in government are concerned. There is a fear that we’ll save a bit of money now only to lock ourselves into over-the-odds prices in the longer term.”
The government is set to spend some £60 billion ($67 billion) over the next six months alone after it committed to supporting people with their tax bills amid the price hike, but deals with Qatar and Norway to boost gas supplies could drop the price.
But if prices recover soon to pre-war levels, then consumers could face higher prices.
A government source told the Times that there were several difficult “political, economic and fiscal” questions involved in the deals.
They added: “Obviously it is all going to depend on the price and how much we have to buy and for how long. We are alive to the risks.”
Truss told Sky News that no agreement had been signed as it stands, but that she was committed to providing long-term energy security for the UK.
“We’ve not signed any deal, but what I’m saying is that Britain’s energy security is vital, and what we will be doing is always looking for value for money,” she said in an interview.
“What’s happened in the past is we’ve ended up being dependent on the global spot price. We’ve seen the effect of that. We’ve seen the fact that people will face bills of £6,000 and I never want Britain to be in that position again.”