Since January gas prices have skyrocketed, last week alone saw gas prices increase by 33 percent, according to National Grid’s data. As a result, smaller energy suppliers have had to close down and pass their customers over to larger companies like British Gas and EDF Energy through the Supplier of Last Resort (SOLR) system.
The latest casualties are 100 percent renewable energy provider Pure Planet, and Colorado Energy, which had a combined total of 250,000 customers.
The SOLR system ensures that no interruptions have occurred to the gas supply of the 1.7 million homes that have been passed over to a bigger company.
However, those customers forced to start a new tariff with a new company can no longer sign up for a low tariff price, as gas prices are soaring.
The annual price cap is set to rise from £1,138 to £1,277 this month for a typical household, this figure has been calculated by reviewing inflation over the last six months, but everyday gas prices are soaring.
British Gas and EDF Energy are among the suppliers set to charge the top rate.
The closure of small energy businesses means hundreds of job losses will occur, and energy giants like British Gas will monopolise the industry, growing their customer base by hundreds of thousands.
Some major companies, however, are refusing to take on any more customers because of short supply and overwhelming demand as more and more customers are being transferred over to them.
According to Sky News, Chancellor Rishi Sunak has appeared to rule out helping smaller energy businesses with rising gas prices.
Whilst Mr Sunak said the Government is doing everything it can to address supply issues, he also emphasised that the Government “can’t fix every problem” and that he believes in a “market economy”.
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As winter is just around the corner, and demand for energy increases, it is expected that more and more energy companies will go under, and bills will rise exponentially over the next year.
Neil Lawrence, director of retail at regulator Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue.”
He added: “We will update you when we have chosen a new supplier, who will then get in touch about your tariff.
“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.”
Despite Ofgem’s guarantee that household’s fuel supply will not be affected, they cannot ensure that Britons’ pockets won’t be.
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