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Energy cost can affect food packaging and toilet rolls

Toilet paper and food packaging might be affected by higher energy costs as firms restrict production to protect their finances

The chief of the Confederation of Paper Industries called for a “temporary winter cost containment measure” to help companies in the sector with costs going “through the roof”. The warnings came after wholesale gas prices surged to a record high, although they dropped back after Russian President Vladimir Putin said the country would stabilize the market.

Confederation of Paper Industries director general Andrew Large said its members are being “very, very severely affected” by rising costs.

He said on a radio show that cost increases are impacting a variety of key sectors, including food packaging, toilet paper and the production of sterile medical packaging. That they’re seeing their costs skyrocket and that it’s damaging their profitability and, in some cases, “it’s causing them to manage their production rates so as not to expose themselves to the very highest costs.”

Large also commented that there is no cap on companies’ energy costs and called for a ” temporary winter cost containment measure to try and put a lid on those costs so that these very important industries for British society are going to be able to continue to operate.”

Research agency Cornwall Insight has predicted further volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to about £1,660 in the summer. The forecast is approximately 30% higher than the record £1,277 price cap set for winter 2021-22, which commenced at the start of October.

Craig Lowrey, senior consultant at the company, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap (£1,277 for a typical dual fuel direct debit customer) for winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation.”

Energy regulator Ofgem reviews the price cap every six months, and changes it based on the cost suppliers pay for their energy, cost of policies and operating costs, among other things.

The regulator said to BBC: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter. However, if global gas prices remain high, then when we update the price cap unfortunately the level would increase. Any customer worried about paying their energy bill should contact their supplier to access the range of support available.”

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