British PM warns against high gas prices

British industry could be affected by high gas prices this winter, the government confirmed Wednesday, but insisted there was no shortage of energy supply.

Prime Minister Tony Blair told the House of Commons there would be "difficulties with gas prices because of the cold winter we are likely to have."

"There is a problem for high level industry users," Blair said. But he insisted domestic users would not be hit, and rejected claims of government incompetence.

Britain is facing a colder-than-average winter, prompting fears of gas shortages and causing prices to rise dramatically. Heavy industrial users have warned they may have to cut production, and the issue has become politically sensitive in recent days.

Opposition Conservative Party leader Michael Howard said gas prices were almost five times higher than they were a month ago. "Manufacturers are being forced to switch from gas to oil to generate electricity," he said, and accused the government of failing to plan adequately.

Energy Minister Malcolm Wicks insisted there was no problem with supply, and said the National Grid had assured him it was "awash with gas at the present moment."

He said gas storage levels "remain full or nearly full."

"The facts are that, so far this winter, there have been no gas shortages, and supply and demand have remained in balance," he said.

Britain has been forced to import more gas from France and Germany as its own North Sea gas production continues to decline. Blair's government has blamed the current high energy prices on European neighbors failing to implement EU liberalization policies, the AP reports.

V.Y.