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Ofgem chief says more energy firms could go bust

Joanna Faith
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Joanna Faith

More energy suppliers could go out of business in the coming months, the chief executive of Ofgem has warned.

Speaking to MPs at a Business, Energy and Industrial Strategy Select Committee (BEIS) hearing, Jonathan Brearley said the change in the gas price was “not something we’ve seen before at this pace”.

“It is not unusual for suppliers to go out of the market. What’s different this time is the dramatic change in costs suppliers are facing,” he said.

“We do expect more [suppliers] not to be able to face the circumstances we are in, but it is genuinely hard to say more than that, partly because that means predicting what might happen to the gas price.

“We do expect a large number of customers to be affected. We’ve already seen hundreds of thousands of customers affected. It might go well above that.”

Soaring wholesale gas prices have led to the collapse of several small energy suppliers in recent weeks.

It was revealed this morning that two more firms – Igloo Energy and Green – are both in talks with insolvency advisers.

Green’s chief executive Peter McGirr told The Independent that the firm would not survive without government support – but the government said yesterday that it will not be bailing out failing energy firms.

Wholesale gas prices in the UK have tripled this year after the global economic recovery from the pandemic prompted a spike in demand.