Gas price rise causes collapse of 9 energy firms in the UK

LONDON, ENGLAND - SEPTEMBER 29: An outside view of a petrol station which is run out of fuel in London, United Kingdom on September 29, 2021. The UK has seen long queues formed in front of gas stations after the oil and petrol giant BP and Tesco Alliance announced that a "handful" of petrol stations would be closed in the country due to shortage of lorry drivers. ( Hasan Esen - Anadolu Agency )

During September, six British energy suppliers collapsed, affecting a total of nearly 1.73 million customers. On Wednesday September 29th, three other energy suppliers went bankrupt amid rising wholesale gas prices.

Enstroga, Igloo Energy and Symbio Energy said they would stop trading, according to BBC. Together, the suppliers represent less than 1% of the UK market with a total of about 233,000 customers, Ofgem said.

What will happen to the suppliers’ clients?

The three energy supplies follow six others which have collapsed in recent weeks. A total of nearly 1.73m customers have been affected in September.

Neil Lawrence, director of retail at Ofgem, said: “I want to reassure customers of Enstroga, Igloo Energy and Symbio Energy that they do not need to worry.

“Ofgem will choose a new supplier for you. While we are doing this, our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal,” the BBC quoted.

On Monday, Ofgem announced Shell Energy had been appointed as the new supplier for 255,000 gas and electricity customers of Green, which collapsed last week.

What do experts say?

Jonathan Brearley, chief executive of Ofgem, previously told the BBC: “As underlying costs rise, pressure on bills does go up.”

Mr Brearley stressed that the current crisis is not due to a failure in the market’s management.

The government has said it is looking at issuing loans to bigger energy firms to help them take on stranded customers.

In response to the news, Business Secretary Kwasi Kwarteng has said the government would “not be bailing out failed companies.”

In an analysis published by the BBC, financial correspondent Kevin Peachey said these updates suggest the fuel crisis will last longer than many expect. He stressed that thousands of customers moving to new suppliers will undoubtedly face higher tariffs.

Source: BBC


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