Energy News: Bills Expected to Soar as Ailing Companies Pass Costs on to Consumers | World | New
Alan Brown, SNP MP for Kilmarnock and Loudoun, believes the government must step in to protect the less wealthy from the impact of soaring prices, stressing that businesses are sure to pass the costs on to consumers. It comes as Scottish Power chief executive Keith Anderson has claimed the UK energy market faces an outright slaughter that could force at least 20 more suppliers out of business next month alone, unless the government does revise the energy price cap.
Mr Brown, who heads the APPG on energy costs, was speaking before Bulb energy became the last company to go down, with energy watchdog Ofgem suggesting it could go bankrupt as early as the week next.
Bulb is the UK’s seventh-largest energy supplier, with around 1.7 million residential customers.
If the company goes bankrupt, it will suffer the same fate as companies like Avro Energy, Green Network Energy and People’s Energy, all of which went bankrupt this year.
However, he added: “The risks however are still increasing costs and pressure on Ofgem to keep raising the cap.
“In addition, each time a company goes bankrupt, all additional costs are borne by all energy users through deductions from our bills.
“Customer credit is protected when a business goes bankrupt, which is good.
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“They are making more money than expected from oil and gas revenues and more money from gasoline taxes.
“They should recirculate this unexpected windfall to help those in need. “
Bulb – launched six years ago by Amit Gudka and Hayden Wood – has since racked up a six percent market share.
It comes as Scottish Power chief executive Keith Anderson has claimed the UK energy market faces an outright slaughter that could force at least more than 20 suppliers out of business.
Speaking earlier this month, Anderson told the Financial Times: “There is a significant risk that the market will shrink to five or six companies.
“We expect, probably within the next month, that at least 20 more vendors will eventually go bankrupt.”
Natural gas prices have skyrocketed this year as economies reopened after COVID-19 lockdowns and strong demand for liquefied natural gas in Asia has lowered supplies in Europe, sending shockwaves through industries dependent on electricity.
Around 13 UK suppliers have collapsed in recent months, forcing more than two million customers to switch suppliers so far.
Before the crisis, there were over 50 small and medium-sized independent energy providers in Britain with a market share of around 30 percent.
Scottish Power, owned by Iberdrola, is Britain’s fifth-largest energy supplier with around 8% of the national gas supply market, according to data from regulator Ofgem.
Speaking on Friday, a Bulb spokesperson said: “Our discussions with several parties for additional financing continue to progress well and we are encouraged by the decline in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effects on the industry as a whole, but ministers and Ofgem have made it clear that we need to emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past. “