By UK energy regulator boss warns of more gas companies going bust in coming months
The head of the UK’s energy regulator, Jonathan Brearley, has warned of “well above” hundreds of thousands of customers being left in the lurch as more suppliers are predicted to go bust within the next few months.
The Ofgem boss told MPs on the Business Committee that the rapid rise in gas prices are “something we have not seen before” and that more firms are set to go under.
But he declined to comment on whether this means “millions” of customers will be forced to find a new supplier, the BBC reports.
However, he insisted that Ofgem had plans in place on how to cope as the crisis develops – which has seen a rise in wholesale gas prices by 250 percent since the beginning of the year, and a 70 percent rise since August alone.
The situation has seen several suppliers of domestic energy hit financial trouble.
One of the main reasons for the price surge is an “uptick” in global gas demand as economies reopen after Covid-19 lockdowns, according to the government.
It says this, combined with a cold winter in 2020-21 which prompted higher demand, has led to a “much tighter gas market with less spare capacity”.
Brearley told the committee: “We do expect a large number of customers to be affected. We’ve already seen hundreds of thousands of customers affected, that may well go well above that. It’s very hard for me to put a figure on it.”
More would go under, Mr Brearley said, although he said commercial talks with the firms prevented him from speculating how many.
He continued: “It’s not unusual for suppliers to go out of the market. I think what is different this time is that dramatic change in the costs that those suppliers are facing.
“We do expect more (suppliers) not to be able to face the circumstances we’re in, but it’s genuinely hard to say more than that, partly because that means predicting what may happen to the gas price.”
Some critics have blamed Ofgem’s domestic energy price cap for preventing suppliers from passing on the cost of more expensive wholesale gas.
But he said the cap was designed to protect consumers: “It is good that it is there.”
