Ineos is pausing production at three chemical plants in Hull, with billionaire founder and chairman Sir Jim Ratcliffe warning that soaring UK gas prices are “destroying” the country’s manufacturing base.
The plants produce essential chemical raw materials used across industries including pharmaceuticals, clothing, cosmetics, construction and military explosives.
Around 1,000 employees are expected to be directly affected by the decision, including 245 workers employed at the three sites. Ineos said the disruption could have knock-on consequences for a further 3,000 skilled jobs across Humberside.
Two of the plants have already stopped production, while the third is expected to be paused within days.
Ratcliffe said Ineos was “being forced to mothball some of the most efficient plants in Europe” because of the widening gap between energy costs in Britain and those faced by competitors overseas.
“With gas prices now 12 times the level in the US and eight times that of China, we just cannot compete,” he said.
He accused the UK of allowing “ridiculously high” energy prices to undermine domestic industry, warning that they were “destroying our manufacturing base and the jobs of hard-working people on Humberside”.
The plants are particularly exposed to gas prices because natural gas is used both to generate energy and as part of the chemical production process.
The move highlights the vulnerability of energy-intensive British industry to international gas-market volatility, with manufacturers already facing significantly higher operating costs than many competitors in the US and Asia.
UK wholesale natural gas prices have roughly doubled between July and September, recently reaching their highest level since December 2022.
The increase has come as energy markets have been disrupted by the conflict involving the US, Israel and Iran and uncertainty over oil and gas supplies through the Strait of Hormuz, one of the world’s most important energy shipping routes.
For Ineos, the escalation in energy costs has turned the economics of operating some UK facilities increasingly difficult, raising fresh questions over the future of energy-intensive manufacturing in Britain.
The company’s decision to mothball production at the Hull sites also threatens to reverberate beyond the plants themselves, given their role in supplying chemical inputs to a broad range of downstream industries.
Ineos’s warning adds to mounting pressure on UK policymakers to address the structural gap between British industrial energy costs and those faced by manufacturers in competing economies.
The company’s decision demonstrates how quickly a shock in global energy markets can feed through into domestic production, employment and supply chains — particularly in sectors where gas is both a critical input and a major component of operating costs.
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