Written statement: Energy Markets Update - April 29

Minister for Energy (Michael Shanks): The Government is working tirelessly with international partners to find a permanent solution to the current Middle East Conflict, and is playing a leading role in the international effort to support the free flow of shipping through the Strait of Hormuz. While this work continues, traffic through the Strait remains severely restricted, and the impact of recent events will be felt across global markets for some time to come.

Over the last two months, the Energy Secretary and I have been in frequent contact with international partners, and the UK has acted alongside them to minimise disruption to energy markets, including contributing 14 million barrels of oil to the largest International Energy Agency stock release in history. I have engaged counterparts in Europe, including during a visit to Spain last week, and have just returned from Ukraine, whose energy sector the UK continues to support in the context of both ongoing Russian attacks and the wider international situation.

Alongside this international engagement, we are increasing domestic preparations to monitor and mitigate the potential knock-on impacts on families and businesses in the UK. The Prime Minister Chaired a Middle East Response Committee meeting yesterday to drive this work forward.

On energy bills, thanks to decisions we took in the Budget, the energy price cap fell by £117 a year at the start of this month, with savings locked in until the end of June. We also extended the £150 Warm Homes Discount to around 6 million low-income households. At the start of this crisis, the Government took immediate action announcing over £50 million of support for vulnerable heating oil customers particularly exposed to rising prices.

In line with the Government's Industrial Strategy, the Chancellor also announced an expansion of the British Industrial Competitiveness Scheme, cutting bills for thousands of energy intensive businesses. We will continue to monitor impacts on bills and stand up for families and businesses.

On petrol and diesel, we are engaging closely with industry to help keep costs down for drivers. The 5p fuel duty cut has been extended until September and the Competition and Markets Authority has put industry on notice that they are monitoring prices closely. Our Fuel Finder tool supports transparency by helping drivers identify the cheapest fuel locally with over 90% of petrol stations registered. The CMA will prioritise enforcement action against retailers identified by the data aggregator who are not signing up or reporting prices as they should. In terms of supply, the AA and Fuels Industry UK are clear that production and imports are continuing as usual. The UK produces more petrol than it uses, making it a net exporter. Supplies remain resilient, and stations continue to be well stocked.

Since the closure of the Strait, we have been closely monitoring UK jet fuel stocks and working with airlines, airports, fuel suppliers and international counterparts. UK airlines typically buy fuel months in advance, and aviation fuel suppliers hold bunkered stocks. The UK imports jet fuel supplies from a range of countries not reliant on the Strait, including the United States. Airlines UK have stated that “UK airlines continue to operate normally and are not experiencing issues with jet fuel supply.” The Government continues to work with partners to monitor and mitigate potential disruptions.

The Government continues to plan for a range of contingencies to increase flexibility on jet fuel supply, we have asked UK refineries to maximise jet fuel supply. Airport Coordination Limited has updated its guidance to allow airlines to apply for slot alleviation, providing greater flexibility to plan flights. I encourage all passengers to check their rights before travelling and in the first instance to contact their airline, travel agent or tour operator where they have concerns. We have published a fact sheet on GOV.UK that will be kept updated, alongside Foreign, Commonwealth and Development Office travel advice.

We are determined to draw the right long-term lessons for the UK's energy security. Four years on from Russia's invasion of Ukraine, recent events have again highlighted the risks of exposure to volatile international fossil fuel markets. Last week I attended WindEurope, where I heard from the Spanish Prime Minister and others about how EU countries are responding by accelerating their transitions to clean energy.

In the UK, the Energy Secretary set out last Tuesday how we are going further and faster on our clean energy mission through three strands of direct action:

• Firstly, accelerating delivery of clean, homegrown power that we control. In the first weeks of the war, we announced that we would bring forward the next renewables auction to July and speed ahead on new nuclear power. That work is being stepped up through a cross-government sprint to unlock the potential for renewables on public land, alongside measures to deliver the grid infrastructure we need, including changes to land access rules and to the consenting process for networks.

• Second, accelerating electrification across the economy. Technologies such as solar, batteries, heat pumps, and electric vehicles can cut bills and help shield households and businesses from international fossil fuel price shocks. The £15 billion Warm Homes Plan is the largest public investment in home upgrades in British history and is being accelerated to support as many households as possible ahead of winter.

• Third, taking clear action to reduce the extent to which gas prices set electricity prices, which can compound the impact of shocks like this. Plans are being brought forward to move legacy low-carbon generators, which provide about a third of the UK's power today, onto fixed price arrangements. We have also announced that the Electricity Generator Levy will increase from 45% to 55% and be extended beyond 2028.

Together, these measures will strengthen incentives to move onto fixed contracts and make funds available to support families and businesses with cost of living impacts.

The Government will continue to act to minimise the impact of events in the Middle East on families and businesses and safeguard the UK's energy security, while learning the right long-term lessons for our country.