Two more UK energy suppliers stop trading on gas price hit (updated)
22/09/2021 15:43
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By Kate Holton
LONDON, Sept 22 (Reuters) - Two more British energy
suppliers stopped trading on Wednesday, leaving more than
800,000 customers potentially facing higher bills, after a jump
in natural gas prices pushed the sector to the brink.
Avro Energy and Green Supplier Limited became the latest
providers to say they would cease trading, following a handful
of others that have exited the market this year. Between them,
Avro and Green held 2.9% of the market's domestic customers.
The country's energy regulator Ofgem and business minister
Kwasi Kwarteng earlier warned parliament that the soaring gas
prices would force more suppliers out of business and that the
industry should prepare for a tougher environment.
The regulator will now select alternative providers to take
on the customers and an industry price cap should limit the
extent of any rise in monthly bills.
"In recent weeks there has been an unprecedented increase in
global gas prices which is putting financial pressure on
suppliers," Ofgem said. It added that it was working with the
government and the industry to protect customers this winter.
Natural gas prices have spiked as economies reopened from
COVID-19 lockdowns and as high demand for liquefied natural gas
in Asia pushed down supplies to Europe, sending shockwaves
through industries reliant on natural gas.
Already meat producers https://www.reuters.com/world/uk/turkeys-wont-be-christmas-menu-if-co2-shortage-persists-2021-09-21
have suffered as high energy prices forced a fertiliser
producer to halt production, denying the food industry the
carbon dioxide by-product that is used to stun animals for
slaughter and pack food. urn:newsml:reuters.com:*:nL8N2QO10E
In the energy market, small providers that had launched in
recent years have been hit by the jump in costs. From more than
70 suppliers in 2018, there are just over 30 now.
Kwarteng told a parliamentary select committee that the
industry had to prepare for longer-term high prices. Analysts
have said that they expect them to remain high until next year.
Kwarteng said Britain has robust systems to cope with
company failures, and small firms which had recently entered the
market should not expect new state handouts.
"I think they should look to their own resources, and look
at their own business models.
"It cannot be right for companies that have entered the
market recently, and now essentially in difficult times,
stretching out a hand for taxpayers' money," he said.
Jonathan Brearley, the head of Ofgem, told parliament that
the rise in prices was unprecedented.
"It really is something that we don't think we've seen
before at this pace," he said.
(Reporting by Kate Holton, Paul Sandle and William James;
Editing by Alison Williams, Elizabeth Piper and Mark Porter)
((kate.holton@thomsonreuters.com; 0044 207 542 8560; Reuters
Messaging: kate.holton.thomsonreuters.com@reuters.net))