Four more energy firms could collapse this week and their customers transferred to higher tariffs.
Companies have allegedly already been talking to regulator Ofgem and announcements on the future from energy firms that could collapse may come as early as today, Wednesday, October 13.
Nine energy companies have already collapsed this month alone and it is reported that the industry is preparing itself for further collapse.
The huge increase in wholesale gas prices is causing chaos for companies in the industry and firms are not allowed to pass the rising costs on to customers because of the energy price cap.
So far, the Government has refused to bail out firms that are facing collapse, however, customers are protected by the ‘supplier of last resort’ system.
This means that Ofgem will transfer customers to a new supplier and also guarantee any credit on their account is protected. Companies such as E-On, EDF Energy and British Gas have taken on the majority of the 1.7 million customers since the beginning of August.
However, bills have increased by hundreds of pounds because the deals customers had with their previous supplier are no longer available.
The energy price cap rose to £1,309 at the beginning of October, and it’s expected to rise again when it is next reviewed in April 2022.
Avro Energy, with 580,000 customers, was the biggest supplier to go bust so far but there have been warnings that the bigger firms are also vulnerable.
London Mayor Sadiq Khan said yesterday that the Government should support businesses hit by the huge increase in gas prices.
He said many businesses are facing “the perfect storm” of rising bills just as they are recovering from the Covid pandemic, during which many “just kept their head above the water.”
“The Government needs to step in and help because actually if they don’t step in and help, many of these businesses will go bust and it’ll be more expensive for the Government to then be contributing towards benefits to those staff who lose their jobs,” he said.
Thank you for taking the time to read this article, do remember to come back and check The Euro Weekly News website for all your up-to-date local and international news stories and remember, you can also follow us on Facebook and Instagram.