Gas prices are soaring
The UK government could offer emergency loans to energy companies to encourage them to take over customers of smaller players at risk of going bankrupt.
Soaring prices mean a number of smaller energy companies can’t deliver on price promises to customers – and a number are set to join the casualty list.
Energy company Bulb is the latest to ask for a bailout. A spokesperson said, “Like everyone in the industry, we monitor wholesale prices and their impact on our business.”
Normally, the Ofgem regulator would assign clients of bankrupt companies to other companies. But these companies are reluctant to assume them as the price of gas rockets.
Prime Minister Boris Johnson has pledged to help and it is understood that short-term loans backed by a government guarantee are being considered.
Wholesale gas prices have risen 250% since January after a cold winter put pressure on supplies to Europe, reducing stored gas levels.
Increased competition for liquefied natural gas, especially from countries in Asia which also experienced the cold, added to the pressure on prices.
People’s Energy, based in Scotland, which was committed to providing low-cost energy, collapsed last week. The 220,000 Utility Point customers, who broke down the same day, were taken over by EdF.
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