why are energy prices rising in the UK, when their main sources is its own North Sea gas?
In: 428
Source does not determine price.
If gas comes from the US or Russia and countries are buying it from them for £2
gas from the north sea will also cost £2. They’re not going to sell it to the UK for £1 just because it’s sourced there. They will sell it for £2 and it doesn’t matter who buys. So if the UK wants gas they must also pay £2.
To get the money back the UK has to tax its producers. But that leads to gas being more expensive to produce in the UK and leads to global price increases.
So now if every producer was taxed £1 for each bit of gas produced, the gas suppliers will want to sell the gas for £3. And so the UK buys at £3 but makes £1 from tax, paying £2. Which is the same as if they hadn’t taxed them in the first place.
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