Revealed, this is the root cause of the crisis in the UK

Jakarta, CNBC Indonesia – Since last week, there has been a lot of foreign media reporting about England. Queen Elizabeth’s country is in crisis.

This crisis is marked by soaring energy prices. Electricity in the country is expensive, not only making household consumers scream but also industry.

This is followed by supply chain needs issues. Not only is food missing from supermarket shelves, fuel oil (BBM) is also scarce.

This has also sparked a “warning” that this year’s winter may be very difficult in the country. Especially at that time, people’s needs such as energy for heating to food will experience a rapid increase.

Then what really happened?

The crisis that occurred in the UK was caused by two main things. First, the increase in natural gas prices and second, distribution problems related to the new immigration rules.

The crisis in the UK began with the gas crisis that hit Europe. Gas prices have soared in the region and have even increased by 250% since January 2021.

One of the reasons why prices have increased is the re-opening of countries’ economies after the lockdown due to Covid-19. This combined with the onset of winter, which pushed demand higher, both in Europe and Asia.

Gas supply is also reduced due to the stoppage of production at facilities owned by the United States (US). This is also due to the tightening of carbon market regulations in the European Union (EU).

There is also the issue of manipulation of the Russian gas company, Gazprom, to push up prices. Not to mention the wind power that doesn’t work optimally in winter.

As a result of this, a number of countries were hit hard, including the UK. In that country, its citizens’ electricity bills are currently the most expensive in Europe.

The electricity tariff has gone up high, even reaching 475 pounds or around Rp. 9.3 million. Electricity purchase contract prices are also near record highs in the UK, due to a large amount of electricity being imported from France.

It did not stop there, the energy industry was threatened with bankruptcy as a group. The average price of electricity production is 291.18 euros (Rp 4.8 million) per megawatt-hour.

The increase in gas prices has resulted in the closure of two large fertilizer plants in Teesside and Cheshire. This plant is known to produce carbon dioxide (CO2) as a by-product.

CO2 is used for slaughter and refrigeration systems to extend food stocks, such as meat, poultry and even soft drinks. The chief executive of the UK’s Meat Management Association said in two weeks it was likely the products would disappear from supermarket shelves.

“80% of pigs and poultry are slaughtered by this process,” he stressed, quoted Sky News.

British food supply company Bernard Matthews and 2 Sisters Food Group said the same thing. The supply of turkeys for Christmas, for example, is under threat.

“Now without a supply of CO2, Christmas could be canceled,” said company owner Ranjit Singh Boparan.

Distribution Disturbance

At a time when gas prices rose, the UK also experienced distribution problems. This disruption is caused by the shortage of truck drivers in the country due to increasingly strict immigration regulations after Brexit.

This makes truck drivers who are mostly immigrants, have to return to their country immediately. This hinders delivery.

The increasingly expensive price of natural gas makes motor vehicles have to compete with the industry to survive. The high price of natural gas, which soared 35.44% in the past month, has made the business world turn to fuel oil (BBM) as an energy source.

However, the small supply due to disruption of the distribution chain due to the lack of drivers, cannot meet this need. As a result, you can see long lines of vehicles wanting to refuel.

BP, the oil and gas giant in Big Ben, revealed that nearly a third of gas stations had run out of the two main types of fuel. Monday (27/9/2021), it was reported how empty fuel and queues were snaking at the country’s gas stations.

“With high demand in recent days, we estimate that around 30% of gas stations have no primary fuel supply. We will seek to get supplies back available as soon as possible,” BP said in a statement.

Photo: A shopper looks at an empty shelf in the meat aisle at the Co-Op supermarket, Harpenden, England, September 22, 2021. (REUTERS/Peter Cziborra) A shopper looks at produce and empty shelves of the meat aisle in Co-Op supermarket, Harpenden, Britain, September 22, 2021. REUTERS/Peter Cziborra- –

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