Energy firms may get loans to rescue customers
Gas prices are rocketing
The UK government may offer emergency loans to energy companies to encourage them to take on the customers of smaller players at risk of going bust.
Soaring prices mean a number of small energy companies cannot meet the price promises to customers – and a number are expected to join the list of casualties.
Energy company Bulb is the latest to seek a bailout. A spokesman said: “Like everyone in the industry, we’re monitoring wholesale prices and their impact on our business.”
Normally, the regulator Ofgem would allocate the customers of failed firms to other companies. But these companies are reluctant to take them on 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 state guarantee are being considered.
Wholesale gas prices have risen by 250% since January after a cold winter put pressure on Europe’s supplies, running down levels of stored gas.
Increased competition for liquefied natural gas, particularly from countries in Asia which also experienced cold weather, has added to the pressure on prices.
Scotland-based People’s Energy, which pledged low cost energy, collapsed last week. The 220,000 customers of Utility Point, which failed on the same day, have been taken on by EdF.