Kemi Badenoch, leader of the Conservative party, has proposed a plan to increase oil and gas drilling in the North Sea, claiming it would cut household energy bills by £200. However, experts argue that the plan is unlikely to reduce prices for UK consumers.
The proposal comes amid volatile global oil prices, which hit $100 a barrel following the US-Israel attack on Iran. Ongoing supply issues from the partial closure of the Strait of Hormuz could push prices to $150 a barrel or more, according to some estimates.
Critics point out that the UK is a price taker in global energy markets, meaning domestic production has little impact on prices paid by consumers. Even if new North Sea fields were opened, the extra output would be sold on international markets rather than earmarked for UK use.
Higher oil and gas prices would also affect the cost of petrol, home heating, and gas, with knock-on inflationary pressures on food, consumer goods, and industrial components. The plan's effectiveness in shielding UK consumers from these global price shocks is therefore questioned.
