Senior UK industry figures have urged the government to increase contingency planning in response to supply risks linked to the ongoing Iran war. Business leaders identified three critical areas—jet fuel, ammonia for fertilizers, and helium—that require urgent government attention to prevent shortages and price spikes.
Jet Fuel Supply and Rising Airfares
Jet fuel availability is under threat due to limited storage capacity and supply disruptions stemming from the Iran conflict. Prices have surged by 72% since the crisis began, and many airlines do not hedge fuel purchases, increasing the likelihood of higher ticket costs. Industry sources warn these pressures could affect summer and autumn flight schedules, with Bloomberg reporting rising airfares already impacting holiday travel planning.
Ammonia Shortages and Food Price Risks
The fertilizer sector faces challenges because the UK lacks sufficient domestic ammonia production facilities. Ammonia is essential for fertilizer manufacturing, and supply or price issues can reduce agricultural yields, exacerbating food inflation during a critical period for the market. Government officials recognize the risks of price spikes leading to lowered fertilizer use and higher food costs over the next year.
Helium Supply Constraints and Industrial Impact
Helium, vital for semiconductors, medical imaging, scientific equipment, and defense, is also at risk. With Qatar controlling one of only two major global helium sources, the government is considering measures such as mandated stockpiles and partnerships with countries like Canada and Norway to diversify supplies. However, global competition and supply complexity pose ongoing challenges.
Business Secretary Peter Kyle has held discussions with industry leaders affirming that the government is actively working on these issues. Notably, steps are underway to reopen the Ensus Teesside plant, which produces ethanol and carbon dioxide critical for industrial processes, after its closure linked to a US-UK trade deal provision.
Officials note that soaring energy costs, partly due to the Iran war’s impact on European fertilizer plants, have also contributed to potential carbon dioxide shortages affecting various sectors. The Treasury plans forthcoming meetings with bank executives to address wider economic pressures related to inflation and interest rate increases.
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