President Vladimir Putin’s invasion of Ukraine is set to affect everything from gas prices to the cost of mayonnaise
So how exactly has the invasion impacted the cost of living in the UK – and is it still worse to come?
Here’s what you need to know.
What will Russia-Ukraine mean for energy prices?
It forced Ofgem to raise the energy price cap by more than 50% to £1,971 from April.
This is because Russia is the world’s second-biggest producer and largest exporter of natural gas.
So, any move by Russia to turn off its gas pipelines or any new energy focused sanctions from the West would be likely to push energy prices up for UK households.
This could take place regardless of the fact the UK does not matter much Russian gas, as the implications would be felt on global energy markets.
Gas prices have already risen in response to the war in Ukraine, and are now more than 20 times higher than they were two years ago.
Some Conservative MPs have also called on the Government to expand North Sea oil and gas production and allow fracking, while Greenpeace campaigners have urged for more investment in renewables.
Thus far, the Government appears to have opted for the North Sea option and is reported by The Times to be on the verge of granting the first oil and gas exploration licenses since 2019.
But these are unlikely to lead to new production for what could be 28 years, according to Greenpeace.
How will Russia-Ukraine affect fuel pump prices?
This is due to speculation that Russia could turn the taps off or that there could be a ban on Russian oil imports by countries dependent on them.
So far, only the UK, US and Canada have announced bans, but none of them import much – if any – Russian oil.
This is because Russia is the world’s third largest individual producer of oil, responsible for around 11% of global output.
Russia’s deputy-prime minister Alexander Novak said the price per barrel of Brent crude oil – a key yardstick for global markets – could hit $300 should the Western world introduce import bans on Russian oil.
It’s a figure which could be designed to spook the West.
But whatever happens, it seems likely more record prices are set to come at petrol pumps.
The Government says it is mitigating price increases by keeping fuel duty frozen.
However, it has been urged to go further by road user organisations.
FairFuelUK wants to see fuel duty cut back by at least 5p per litre, while the Road Haulage Association (RHA) wants to see rebates for essential road users, like lorry drivers, of 15p per litre.
Impact of Russia-Ukraine on food prices
The conflict in Ukraine looks set to increase the cost of many food and drink items.
Both Russia and Ukraine are major producers of grain, while Ukraine is also a key producer of rapeseed oil and sunflower oil.
The sanctions on Russia means its grain exports look set to be limited.
And Ukraine’s ability to export anything has also been all but halted as its Black Sea ports have closed and will remain as such until Russian forces withdraw.
Grain markets have already gone up as a result, with benchmark Chicago wheat futures soaring 40.6% in price over the course of last week, and another yardstick – Paris milling wheat – rising 28.3%.
It means the price of products, such as bread and pasta, could be set to rise.
Pasta prices have already risen sharply as a result of poor wheat harvests in Canada last year, with the ONS recording a 26% increase in December 2021 alone.
Cost increases could also be expected for products containing rapeseed and sunflower oils, which are key ingredients in everything from butters and spreads to sauces like mayonnaise.
Food production inputs, like animal feed and fertilizer, also look set to become more expensive and less readily available as a result of the invasion given Russia exports many key raw materials, such as potash for fertilizer production.
It means the price of fresh British meat, fruit and veg could go up and its availability could be compromised.
If fertilizer manufacturing is compromised, there might also be more issues with CO2 gas production – something which could affect everything from the bubbles in your beer to the shelf-life of meat products.
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