Toilet paper production may have to be restricted because of energy costs

Toilet paper and food packaging could be hit by rising energy costs as companies cut back on production to protect their finances, industry leaders warned.

The head of the Association of the Paper Industry called for a “temporary winter cost containment measure” to help companies in the industry with “skyrocketing costs”.

And the UK ceramics sector said some companies may be forced to stop production due to high energy costs.

The warnings came after wholesale gas prices hit record highs on Wednesday, despite falling after Russian President Vladimir Putin said the country would stabilize the market.

Andrew Large, director general of the Confederation of Paper Industries, said its members were “very, very badly” hit by the cost increases.

He told BBC Radio 4’s Today program: “You are seeing your costs soar.

“This hurts their profitability and in some cases forces them to control their production rates so that they don’t expose themselves to the very highest costs.”

He said there was no cap on corporate energy costs and called for a “temporary winter cost containment measure to try to limit those costs so these industries that are very, very important to British society can continue to operate”.

Mr Large said the cost increases are affecting a variety of key sectors, including food packaging, toilet paper, and sterile medical packaging manufacturing.

Laura Cohen, chairman of the board of the British Ceramic Confederation, told the BBC that energy prices are hurting the viability of businesses.

She said, “As prices rise, more members are likely to be forced to stop production due to uneconomically higher energy costs.

“But we also worry that prices reflect the market’s view of the physical availability of gas over the winter.

“In the event of national supply bottlenecks, our members are at the front of the queue to be pushed out of the gas network while the households are last, and this can happen at very short notice.

“A forced shutdown carries a very high risk of serious damage to brick kilns, which can be 100 meters long and operate above 1,000 ° C, which can jeopardize the profitability of the business.”

Soaring energy bills are expected to hit the everyday British too, with analysts predicting bills could rise 30% over the next year.

Research agency Cornwall Insight has predicted further volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to around £ 1,660 in the summer.

The forecast is about 30% above the record price cap of £ 1,277 for the winter of 2021-22 that began in early October.

Craig Lowrey, Senior Consultant at the company, said, “As wholesale gas and electricity prices continue to hit new records, successive exits in September 2021 and a new level for the standard tariff cap (£ 1,277 for a typical dual-fuel direct debit customer) for the Winter 2021-22, the UK energy market will remain on the rise in terms of new volatility and further consolidation. “

The energy regulator Ofgem reviews the price cap every six months and changes it based, among other things, on the costs that suppliers pay for their energy, the costs of policies and the operating costs.

In a statement to the BBC, Ofgem admitted it was “a worrying time for many people”.

The regulator added: “The energy price cap applies to around 15 million households and will ensure that consumers do not pay more than is strictly necessary this winter.

“Unfortunately, if global gas prices remain high, the level would rise if the price cap were updated.

“Any customer who is concerned about paying their energy bill should contact their supplier for access to the available support services.”

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