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UK wholesale gas prices hit highest level since February

UK wholesale gas prices have risen again and are now at their highest level since mid-February.

Prices rose to almost 135 pence per therm (a unit of heat used to measure gas) on Friday afternoon.

This comes after gas prices hit a six-month high in almost 123p per therm Tuesday afternoon – a level not seen since early April.

Higher gas prices can drive up household bills because electricity costs are tied to wholesale gas prices.

The UK is preparing for increased gas demand with temperatures drop this weekend, while Israel-Hamas War led to the closure of a gas field off the Israeli coast.

The Tamar natural gas field was shut down at the request of the Israeli energy department and led to a suspension of production starting Monday.

The field supplies gas to Israel, powering electricity generators, as well as to Egypt and Jordan.

Supply was also disrupted after a leak was discovered in the Balticconnector pipeline, which transports gas between Estonia and Finland.

Finnish Prime Minister Petteri Orpo said the damage may have been caused deliberately.

There have been further supply problems due to the threatened strike by gas workers in Australia.

The gas is used to produce electricity. As of Friday afternoon, 10% of Britain’s electricity was produced from gas.

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The UK wholesale gas price was the highest on record on 26 August 2022, at a cost of 640 pence therm.

Energy costs, particularly gas prices, have skyrocketed following Russia’s invasion of Ukraine.

Western countries have rushed to end their use of Russian gas, increasing demand for alternative supplies and driving up prices.

The most recent high was recorded on February 15, 2023, when the UK wholesale gas price was 137.25 pence therm.

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