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Energy industry seeks emergency loans as suppliers struggle to stay afloat
The government is to hold crisis talks with energy firms amid concerns more suppliers could go bust as they struggle to cope with soaring gas prices.
Four energy providers have collapsed in the last fortnight as wholesale gas prices have shot up by 250 per cent since January and 70 per cent since last month, according to industry organisation OGUK.
Utility Point, People’s Energy, PfP Energy and MoneyPlus Energy, which collectively supplied more than half a million domestic customers, have all ceased trading.
Bulb, the UK’s sixth largest energy company, is seeking a bailout from the government to stay afloat.
A spokesperson from Bulb said: “From time to time we explore various opportunities to fund our business plans and further our mission to lower bills and lower CO2. Like everyone in the industry, we’re monitoring wholesale prices and their impact on our business.”
Business secretary Kwasi Kwarteng met with the regulator Ofgem on Sunday and will hold talks with industry bosses today to discuss handing out emergency state-back loans to struggling energy firms.
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Kwarteng tweeted: “I understand this will be a worrying time for businesses and consumers. We are working hard to manage the impact of global gas price rises.
“Unfortunately, small energy suppliers are facing pressures due to the sudden increases in global gas prices.
“If a supplier fails, Ofgem will ensure customers’ gas and electricity supply will continue uninterrupted.”
Foreign Office minister James Cleverly said the Government wanted energy suppliers to “stay afloat through their own efforts”.
Speaking to BBC Breakfast, he said: “Ultimately, what we want to do is to ensure that they stay afloat organically.
“Businesses should stay afloat through their own efforts, ideally. What we want to make sure is that we protect the integrity of our supply, we protect consumers, both commercial and residential, and we will discuss with the industry the best way of doing that.
“We want to see a diversity in the market, of course we do, we also want to protect, as I say, consumers. Exactly how we do this, this is up for discussion, and I’m not going to speculate on the programme exactly how that might happen.”
What to do if your energy firm goes bust
Under Ofgem’s safety net, customers’ energy supply should continue uninterrupted and any outstanding credit balances will be protected.
The regulator’s advice is not to switch supplier until a new one has been appointed and you have been contacted by them about your new tariff.
If you are unhappy with the new tariff, you will be able to switch supplier.