Six more energy firms in UK face closure before Christmas, thereby throwing hundreds of thousands of households on the brink of losing their energy supplier. Energyhelpline predicts that the energy price cap could be hiked by £475 in February, taking the average bill up to £1,750. Already some 3.8 million customers have seen their energy provider go bust, causing disruption and a spike in bills.
Many households are already struggling to cope, with many facing the choice between heating and eating this winter. Mark Bennett, head of energy at Energyhelpline.com, said: “Unfortunately, with wholesale prices showing no signs of reducing in the near future, we can expect more energy suppliers to cease trading in the coming weeks.”
Smaller firms have struggled to cope with soaring wholesale gas prices. That’s because businesses can’t pass on those rising costs to customers who are on a fixed tariffs, meaning they have to absorb the increase themselves. This left many firms running at a loss.
A number of factors are driving wholesale energy prices up, including higher than expected demand as economies re-opened after lockdowns and low supply. The UK imports more than two-thirds of its gas, and imported energy is more exposed to global price swings, which can make prices more volatile.