Sir Jim Ratcliffe suspends production at key UK plants blaming high gas prices

Billionaire Sir Jim Ratcliffe's industrial company Ineos has halted production at its three plants in Hull due to skyrocketing UK gas prices. The firm pointed out that gas prices in the UK are 12 times higher than in the US and 8 times higher than China's coal-based processes. Sir Jim lamented: "We are compelled to shut down some of the most efficient plants in Europe, but with gas prices now 12 times the level in the US and 8 times that of China, we simply cannot compete."

Ineos Acetyls, a key player in producing crucial chemicals used in food, medicines, and explosives, is being forced to make this move. The gas is a vital ingredient in their production process. The decision will impact up to 1,000 employees, with 245 directly involved at the site. However, it's understood that workers across the sites will remain employed as Ineos explores purchasing liquefied natural gas (LNG) directly from the US at lower prices, a process that could take up to a year, or waits for gas prices to decrease.

Ineos is lobbying for tariff protections against Chinese products from both UK and EU governments, given most of its products are exported there. Two plants on the site have already been shut down, and the third will follow in the coming days. The sites manufacture acetic acid, used in vinegar, paint, and glue; acetic anhydride, a key component in aspirin; and ethyl acetate, a solvent and decaffeinating agent for tea and coffee.

The surge in gas prices worldwide has been attributed to the disruption of oil and gas supplies through the Strait of Hormuz following the US-Israel war in Iran. UK and European gas prices have nearly doubled since July. Sir Jim criticized the current government's energy policy as "economic vandalism on an industrial scale." This is the second time in less than a week that he's harshly criticized government policy.

He recently stated losing confidence in the UK, attributing it to high taxes and immigration. Sir Jim, with an estimated wealth of £15bn, has previously sparked controversy with his views on immigration. He's a Brexit supporter but has been a tax resident in Monaco since 2020.

The Department for Business, Innovation, Science and Trade acknowledged the situation as "concerning for workers in Saltend and their families." They highlighted bold measures taken to support the chemicals industry, including a £350 million investment for strategically important chemical producers, available on a co-investment basis. They also implemented trade measures on foreign chemicals imports and are addressing high electricity costs through schemes to boost industrial competitiveness.