Energy bills set to hit £3,000 as gas prices soar Business

Russia and Ukraine are huge producers of commodities, especially grain and vegetable oil. Together, they globally provide 29% wheat, 19% corn and 80% sunflower oil.

Although they mainly supply Asian and North African markets, the conflict will choke off global supply as buyers scramble to secure imports from elsewhere and drive up prices for a range of products, from bread to biofuels .

Michael Magdovitz, commodity strategist at Rabobank, said the impact could be “catastrophic” if ports are still closed when harvests begin in spring and summer.

He said: “Grain markets are not incredibly resilient at the moment because stocks are already quite low for grains.

“There are a lot of questions about whether or not we can get a substantial resupply. With Ukraine and Russia out of the market, that’s impossible.

Karen Betts, chief executive of the Food and Drink Foundation, said the disruptions in Ukraine were likely to drive up the cost of such products.

“It will be further compounded if there are sustained increases in energy prices, adding to an already troubling inflationary picture,” she said.

British Gas: No “immediate” price increase

Speaking hours after Moscow launched its assault on Ukraine, the managing director of British Gas Centrica owner Chris O’Shea insisted his company would be able to meet its of electricity and gas despite the “unprecedented” situation.

“We can deliver to consumers anything that we promised to deliver,” he said.

He was speaking as Centrica revealed profits had more than doubled to £948m last year, largely due to a surge in sales from its oil and gas business. The company intended to repay £27million received under the pandemic leave scheme.

Mr O’Shea also confirmed that he would not receive an annual bonus, given the cost of living pressures his millions of customers faced.

MPs and experts have warned that these pressures could worsen as the Russian-Ukrainian conflict drives up commodity prices and stock markets fall.

Responding to questions about the impact the Ukraine dispute could have on energy prices, Mr O’Shea said: “I don’t think it will help anyone to speculate on what it might do in the UK. . It’s absolutely unprecedented, so we’ll have to wait and see.

Emphasizing what this meant for customers, he added: “What we have made clear is that when we commit to supplying gas and electricity to customers, we make sure that we can meet this commitment.

“We have very responsible risk management practices, we hedge our portfolio. If other providers had done the same, not all of them would have failed last year. So the immediate impact of this is something consumers shouldn’t really worry about. [about].”

His comments came as Centrica said revenue rose by a fifth to £14.7bn and adjusted operating profit jumped 112% to £948m in 2021.

This follows an increase in annual profits at North Sea oil and gas division Spirit Energy from £84m to £624m.

Oil and gas prices have surged over the past year as economies have recovered from the coronavirus pandemic and supplies from Russia to Europe have remained below expectations.

Centrica said it would pay no dividend for the second year in a row.