Billionaire Sir Jim Ratcliffe’s industrial giant Ineos is pausing production at its three sites in Hull, blaming high UK gas prices. Ineos has confirmed up to 4,000 jobs are affected —1,000 directly and another 3,000 in the supply chain. The firm said gas prices in the UK are twelve times higher than in the US, and eight times more expensive than the coal-based processes used by Chinese competitors. Sir Jim said: “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.” The facilities produce raw materials used to make pharmaceuticals, clothing, cosmetics, detergents, construction materials and military explosives in the UK and Europe.
Gas is used as an ingredient in its production process. BBC News understands that Ineos is trying to obtain liquefied natural gas (LNG) directly from the US at lower prices, but that will take up to a year. Workers across the sites will be kept on while Ineos waits for this to happen, or for gas prices to go down. Ineos is asking governments in the UK and the EU — where most of its products are exported to — to put in tariff protections against Chinese products.
One plant makes acetic acid, which is used in vinegar, paint and glue. Another makes acetic anhydride, a key ingredient of aspirin, and the third makes ethyl acetate, which is used in solvents and decaffeinating tea and coffee. He said the current government’s energy policy was “economic vandalism on an industrial scale”. The wholesale price of natural gas — used for heating homes and generating electricity — has almost doubled in the UK and Europe since July.
Analysts say the main driver has been a reduction in global oil and gas supplies. Ineos says that its plants in Humberside are “among the most efficient in the world”, producing materials with half the carbon footprint of US rivals, and only one eighth the footprint of Chinese equivalents. Two plants are already shut and a third will stop production in coming days, the company said. It did not immediately specify when the plants might start again, or what conditions would make that possible.
It’s the second time in less than a week that Sir Jim, who also owns a large stake in Manchester United, has heavily criticised government policy. He told BBC News last week that he has lost confidence in the UK, describing the country as “on the slide”, which he blamed on high taxes and high immigration. Sir Jim, whose wealth is estimated to be around £15bn, has prompted controversy in the past with his comments on immigration. He was a supporter of Brexit but has been a tax resident in Monaco since 2020.
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