British households are also at risk of gas shortages as Russia threatens to cut supplies to Europe.
Amid growing tensions, Ukraine has refused Russia’s demand to pay a gas debt of around £2billion.
In response, Russia last night threatened to cut gas supplies to Kiev – and there is also a threat to a vital pipeline which runs through Ukraine and supplies gas to the rest of Europe, including the UK.
This is not good news… if the supply was stopped into Europe that would have massive ramifications
-Mark Todd, of energyhelpline
Experts say the cost of energy in Britain has “already started to spike” as a result of the crisis.
And any threat of a shortage could lead to companies “panic buying” which would also push up prices.
The unrest in Ukraine has also sparked warnings of rising food and petrol prices in Britain.
The latest alert comes after Russia’s state gas producer, Gazprom, ordered Ukraine to pay in advance for its gas after it failed to meet a deadline to settle its bill. Russia’s energy minister Alexander Novak said: “Failure automatically leads to a switch to prepayment.”
Mark Todd of energyhelpline said last night: “This is not good news…if the supply was stopped into Europe that would have massive ramifications. I would say the prices have already started to spike with the situation in Ukraine.
“There is also the possibility of shortages if there are problems with supply from Russia.
“A massive amount of Europe’s gas comes from Russia, it is the biggest supplier to the continent.”
He said the threat of a shortage prompts companies to “panic buy” gas, further pushing up wholesale prices and deepening the problem.
Earlier this year Chris Faulkner, chief of US oil and gas exploration and production company Breitling Energy, warned:
“Ukraine is the gas hub for all of the EU. The effects of a major conflict there will surely reverberate throughout Europe.”
Article Author: Nathan Rao