Wholesale gas prices have risen 400% this year in Europe, in part due to low inventories and high demand from Asia, putting particular pressure on energy-intensive industries.
Industry bosses held talks with Business Minister Kwasi Kwarteng on Friday, but said they ended without immediate solutions.
“If the government does not take any action, what we will see for the steel industry are more and more production breaks at certain times of the day and those breaks will get longer,” Gareth Stace, Managing Director by UK Steel. told ITV News.
Likewise, Andrew Large, director general of the Confederation of Paper Industries, told the same broadcaster that he could not rule out factories having to suspend production due to rising energy costs.
David Dalton of the British Glass Manufacturers Association said some companies are within days of shutting down production.
After meeting with industry leaders on Friday, Kwarteng’s department said it was determined to secure a competitive future for UK energy-intensive industries.
He said he “pledged to continue to work closely with businesses over the next few days to better understand and help mitigate the impacts of any cost increases faced by businesses.”
However, some lawmakers in the ruling Conservative Party want more to be done for energy-intensive industries.
“I would like to see more government support for these industries in the short term to make sure we don’t lose them from the UK and discourage further investment,” Andrew Bridgen told the BBC.
“I think they would like to see a cap on the prices they are going to pay for gas.”
The UK economy is already grappling with a supply chain crisis.
A post-Brexit worker shortage, exacerbated by global tensions from the COVID-19 pandemic, has hampered UK supply chains for everything from fuel and pork to poultry and bottled water, putting in danger any recovery after the pandemic.