Europe could face energy rationing this winter as energy costs continue to skyrocket, Shell’s chief executive warned, The Guardian reported. Europe’s ongoing energy crisis comes amid the risk of Russia cutting off gas supplies.
“It will be a really tough winter in Europe,” Shell CEO Ben van Beurden said.
“We will all face very significant escalation in energy prices. In the worst case, Europe will need to ration its energy consumption.”
The warning comes as energy suppliers are urging the British government to intervene in order to keep bills in check.
It follows a £15 billion package of measures announced by the British government in May to ease the cost of living crisis. It includes £400 off energy bills for households in the UK.
Energy prices are forecast to keep rising, from summer into autumn.
There is uncertainty surrounding the extent to which Russia will continue to throttle supply. Russia has been accused of using energy supplies as a leveraging tool in its war against Ukraine.
Van Beurden, speaking at the Aurora spring conference in Oxford, said there was “no way of telling” whether Russia would restart gas flows into Europe through the Nord Stream 1 pipeline.
Annual maintenance began on the pipeline on Monday and will last until July 21. But there are fears in Europe that Russia will find an excuse to keep the pipeline shut down.
“Putin has surprised quite a few of us,” Van Beurden said.
The Shell chief continued that Putin needs to be “taken seriously” when he makes threats and that there had previously been a conceived notion that it would be in Russia’s best interest to keep its largest market.
But now Russia has cut off its gas and oil market.
“He is able and willing to weaponize supplies,” Van Beurden said.
Soaring wholesale energy costs are being passed on to the consumer in the United Kingdom.
New research last week significantly raised forecasts to show that the energy price cap in the UK was on track to rise to £3,244 a year in October 2022.
The average energy bill in the UK is estimated to reach a whopping more than £3,300 annually this winter.
Russia’s ongoing war in Ukraine has caused massive energy issues, both in energy security and in energy accessibility and pricing. It has led to a renewed drive for governments to finally commit to green energy, rather than to keep backsliding into more and more fossil fuels.