Ineos suspends UK plant operations over high gas prices
Billionaire Sir Jim Ratcliffe pauses production at three Hull facilities as UK gas costs surge to 12 times US levels, impacting 1,000 staff.
Stock photo for illustration only, not from the actual event
- Ineos suspends production at three key chemical plants in Hull, UK
- UK gas prices are 12 times higher than in the US and 8 times China
- The disruption affects up to 1,000 workers across the sites
- Company looks into sourcing cheaper liquefied natural gas directly from US
Industrial giant Ineos, led by billionaire Sir Jim Ratcliffe, has announced the suspension of manufacturing operations across its three key plants located in Hull, England. The drastic move comes in direct response to soaring natural gas prices in the United Kingdom, rendering the facilities economically unviable to operate amid intensifying energy market pressures across Europe.
Company executives reported that wholesale gas expenses in the UK currently stand at twelve times the cost in the United States, and roughly eight times more expensive than the coal-reliant production methods utilized by Chinese competitors. Consequently, the firm has been forced to mothball facilities that are recognized among the most efficient in the entire European region, with two sites already shut down and the third scheduled to halt operations within days.
The affected facilities manufacture essential raw materials utilized across multiple sectors, including acetic acid for glues and paints, acetic anhydride for aspirin production, and ethyl acetate used as a solvent and for decaffeinating tea and coffee. Furthermore, these sites produce foundational components for pharmaceuticals, apparel, cosmetics, cleaning detergents, and military explosives, where natural gas serves as a critical ingredient.
Stock photo for illustration only, not from the actual event
"We are being forced to mothball 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 just cannot compete."
Sir Jim Ratcliffe
The abrupt halt is projected to impact up to 1,000 staff members, including 245 personnel stationed directly at the manufacturing sites. Nonetheless, industry insiders indicate that the company intends to retain employees while exploring long-term solutions, such as securing direct shipments of liquefied natural gas from the United States at more competitive rates, a logistical transition that could take up to a year.
This industrial setback highlights the growing vulnerability of European manufacturing sectors dependent on imported energy, exacerbated by global supply chain disruptions following geopolitical tensions around the Strait of Hormuz that have driven wholesale energy prices upward since July. In response, Ineos is actively urging regulatory authorities in both the UK and the European Union to implement protective tariff barriers against subsidized Chinese imports to safeguard domestic industrial competitiveness.
This development follows closely on the heels of previous remarks by Sir Jim, who also holds a substantial ownership stake in Manchester United, heavily criticizing the British government's economic policies. Last week, the billionaire stated he had lost confidence in the UK, describing the nation as being on a downward trajectory due to high taxation and immigration levels. Meanwhile, the Department for Business, Innovation, Science and Trade has been approached for official comment regarding the shutdowns.
Source: BBC Business
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