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Ukraine war 'to hit Jersey in the shops and at the pumps'

Ukraine war 'to hit Jersey in the shops and at the pumps'

Tuesday 08 March 2022

Ukraine war 'to hit Jersey in the shops and at the pumps'

Tuesday 08 March 2022


Islanders are being urged to brace for further food and fuel price hikes due to the invasion of Ukraine – and the Government is being pressed to step up its support for low and middle earners in anticipation.

The day that Russia invaded Ukraine on 24 February, the RAC warned that the country’s aggression had already pushed petrol pump prices to record levels.

Last night, there were warnings that prices could surge to as much as £1.75 per litre amid news from the US that a boycott of Russian energy is being considered, which pushed the price of oil to nearly $140 dollars per barrel. 

But the impact won't only be on fuel.

Ukraine also occupies a key role in the global food supply chain. Accounting for more than 10% of the global wheat market and 30% of global exports combined with Russia, Ukraine has long been known as the "breadbasket of Europe". The country is also the world's largest exporter of common cooking ingredient sunflower oil.

With both exports hit by the conflict in Ukraine, there are fears that the cost of food 'basics' may be set to suffer substantial price increases.

sunfloweroil.jpg

Pictured: Ukraine is the world's biggest exporter of sunflower oil.

Tina Langdon, Executive Officer at the Jersey Consumer Council, says islanders need to be ready to feel the hit in their baskets, at the pump and potentially as a knock-on in the services they use.

"It's almost certainly going to impact the cost of fuel both at the forecourt and at heating level as well.

"It's going to affect gas prices almost certainly and then the onward impact is on services that are needing fuel – you've got your transport services, your delivery services, which impact food costs almost certainly, travel costs for anyone hoping to have got away this year."

The impact, Ms Langdon said, will likely be felt by all income groups, but particularly those on the middle to lower end.

"Everyone is going to be impacted. The low-income earners are always the most impacted by any changes.

"The increases we're seeing at the moment – constantly, wherever you look, whatever you're doing, we are seeing an increase on everything.

"The middle earners are going to start really feeling it too – especially ones that might pay school fees and things like that, and mortgages and rent. It's really quite dire."

The additional blow to islanders' wallets comes at a time when many are already struggling with steep inflation driven by Brexit and the pandemic. Express previously uncovered how food bank usage had risen in line with this.

food inflation 2021

Pictured: A breakdown of the changes in everyday item prices islanders experienced between 2020 and 2021. (Statistics Jersey)

Senator Kristina Moore is calling for the Government to step up its support for islanders in light of these challenges.

She has put forward a proposal to investigate an increase to the Community Costs Bonus – a payment to support islanders who do not earn enough to pay income tax but do not qualify for Income Support with food and cold weather expenses – and extend eligibility, including to middle-earners.

The bonus, which has not been increased since 2019, currently stands at £258.25.

In a report outlining her proposal, Senator Moore highlights existing challenges with the cost of housing, electricity, petrol and food.

"However, this is expected to worsen as a result the recent invasion of Ukraine by the Russian Federation," she explains.

"On the day of the invasion (24 February 2022), the price of British gas for next-day delivery jumped 53% to 326p per therm as the Russian incursion triggered concerns of disruption to global energy supplies.

"Oil prices have increased past £74 a barrel to hit their highest level for more than seven years. It is possible we will see significant food price increase, as Russia and Ukraine are important produces of key agricultural products such as wheat.

"Taken together it is very likely we will see ongoing and increasing cost pressures on consumers and families over the coming 6-12 months arising both because of the pandemic and the impact of the Russian Invasion of Ukraine."

Senator Moore says that the Council of Ministers should determine if and what uplift should be applied to the Community Costs Bonus by the end of April, and allow States Members to vote on it.

kristina-moore.jpg

Pictured: Senator Moore has put forward a proposition asking for Ministers to examine an increase to the Community Costs Bonus.

Her own idea is currently scheduled to face a vote on 29 March.

In the meantime, Ms Langdon said there are things islanders can do to prepare for and manage rising costs.

"We've got energy-saving tips on our website, and we've a price comparison site which gives prices of around 100 household and grocery products every couple of weeks. We also have the forecourt prices and the heating oil prices."

"It's for the benefit of consumers. They can see what store to go to, what forecourt to go to. It's so beneficial," she added, noting that the Consumer Council is currently seeking funding from Government to improve the service even further.

For those who can, Ms Langdon also recommended making the most of the opportunity to bulk-buy essential food items when there are special offers.

"If you can afford to, buy two or three more at the time when you see the offer. Then you're able to perhaps go home and do some batch cooking and stick it in the freezer."

Finally, she suggests islanders embrace the 'second-hand but grand' mentality whether when seeking out clothes or household items.

"Rather than buying new, go and look in the charity shops because it's a win-win."

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Comments

Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

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Posted by Anna W on
Guaranteed all these price increases won't come back down after the war is over.
Posted by Jon Jon on
If this war ever ends things won’t come down ,also seen this Island is on Russia’s unfriendly list !
Posted by Patricia Le Ruez on
Well, if ever there was a report to precipitate panic buying then this is it !
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