Gas crisis: 250,000 customers hit as two more suppliers collapse

·3-min read
A saucepan on a gas hob.   (Photo by Chris Radburn/PA Images via Getty Images)
A surge in natural gas prices has seen a number of companies go out of business. The collapse of the two firms now brings the total number to 14 so far this year, affecting more than two million customers. Photo: Chris Radburn/PA Images via Getty Images

The collapse of two more energy suppliers has created a fresh wave of fear in the sector, and has affected a further 250,000 UK customers.

Pure Planet, which is backed by oil giant BP (BP.L), and Colorado Energy have both ceased trading amid rising wholesale energy prices.

Pure Planet said it had been caught between rising costs and the UK's energy price cap, which restricts what companies can charge consumers.

It said the crisis had left its business "unsustainable" and that “rules prevented us from covering our costs”.

A surge in natural gas prices in recent months has already seen a number of companies go out of business. The two firms’ collapse now brings the total number to 14 so far this year, with more than 2 million customers affected.

In September alone, nine suppliers went bust including Avro Energy and People’s Energy, with business and energy minister Kwasi Kwarteng cautioning that more could collapse in the coming weeks.

Read more: Gas price crisis: PM expected to back millions in bailout loans for industry

The reasons behind the dramatic increase in power prices include low gas reserves, strong commodity and carbon prices, heightened global demand, and low wind output.

“Kwasi Kwarteng says the price cap is non-negotiable. Fair enough,” Pure Planet's founders said. “But that doesn’t mean helping supply companies needs to be non-negotiable too. If he doesn’t act fast, he’ll have no suppliers to be minister of.”

Pure Planet supplied gas and electricity to around 235,000 domestic customers, and Colorado had 15,000. Energy regulator Ofgem will now move these households to new suppliers.

"Ofgem's number one priority is to protect customers," said Neil Lawrence, director of retail at Ofgem.

"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."

Read more: Why UK is facing energy crisis and what it means for consumers

It comes as a key gas supplier also exited the wholesale market. The company CNG, which is backed by commodities giant Glencore (GLEN.L), said it will no longer supply gas to its utilities clients.

It supplies roughly 46,000 small firms, as well as up to 15 small domestic energy suppliers, through its wholesale business.

Paul Stanley, chief executive of CNG, said “the company has been forced into an impossible position” after many of its energy customers ceased trading. Around 18 CNG utility customers now need to find alternative sources of gas.

The news also follows comments from billionaire industrialist Jim Ratcliffe, who last night warned that prices will remain sky-high for the whole of winter, and that the industry could be forced to shut down in the event of a bad winter

He blamed the UK government for failing to secure enough gas supplies relative to other European countries.

“Economically... we’re in a bad place as it is after COVID so you don’t really need to be shutting industry down, and that’s not great for British industry if we’re telling all our customers we can’t supply them,” he said.

The energy crisis could see Brits pay up to 30% more for their energy bills next year.

Watch: Energy crisis: Boris Johnson reportedly backs multi-million pound plan to support businesses

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting