Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Gas price rise to hit plastic pipe output

MATERIALS - Producers call on Government to axe Climate Change Levy to offset gas hike

PLASTIC pipe production could fall victim to the latest increase in energy prices, manufacturers have warned.

They claimed that spiralling gas prices could hit the plastic production industry badly and force manufacturers to reduce output.

Prices for gas are now at a 10-year high after breaking through the £1.70 per therm mark.

This unusually high level has caused plastic producers to call on the Government to look into the scale of the increases and to rethink some of its carbon dioxide reduction policies.

Jim Jeffries, president of industry body the British Plastics Federation, slammed the Government for relying on out-of-date figures to quell the storm.

He claimed that in a letter received by the BPF, Trade and Industry secretary Alan Todd had claimed gas prices in the UK were at the same levels as those in other European Union countries.

He said: 'The minister seems to be relying on outdated information when he states UK gas prices are at or below the EU median. They are substantially higher.' Gas is used extensively by the plastic industry throughout its production process and the sector has been badly hit by the price rises.

Mr Jefferies has become so worried about the rapid price climb that he warned it could affect production capacity.

He said: 'This huge increase in the price of gas will badly hit the plastics industry and could reduce production as it becomes unprofitable.

'It damages investment in the UK.'

And Mr Jeffries called on the Government to rethink its Climate Change Levy.

He said: 'We repeat our calls to the Government to investigate the scale of these increases, to urgently look at the security of gas supplies to the UK and abolish the unfair Climate Change Levy.' The levy forces energy intensive industries to cough up as much as 15 per cent more on top of their energy bills in a bid to promote energy efficiency and reduce carbon dioxide emissions.

The plastic sector is the latest in a series of construction product manufacturing sectors to warn about the effects of rising energy costs.

Concrete, brick, block and asphalt producers have already blamed energy cost hikes for price increases they are due to introduce next year.