Four more energy suppliers have entered crisis talks with Ogfem, with warnings they could collapse as early as Wednesday.
The failures are linked to the soaring price of wholesale gas which has resulted in 12 firms collapsing this year and nine in September.
At least four suppliers were in talks with Ofgem yesterday about a possible collapse and handover of accounts, Sky News reported.
It is possible that some could go bust by the end of this week. Ofgem has been approached for comment.
Smaller firms have found trading unsustainable due to the high costs of wholesale gas, which they have to absorb due to the energy price cap for customers’ bills.
Retailers thought to be on the list include Pure Planet, which became vulnerable at the weekend when it was reported that its major industry backer, BP, was about to pull its support.
Pure Planet, which was founded in 2015, has 250,000 customers.
Sky News reported that insiders were naming Ampower, Zebra Energy and Neon Reef among those that were potentially at risk of collapse.
The imminent closure will not directly affect customers, whose accounts will be transferred to larger suppliers.
Igloo Energy, Utility Point, Green Energy and Avro Energy, which has 580,000 customers, have all crumbled since the start of the current gas crisis.
Wholesale prices for gas have increased 250% since the start of the year, and there has been a 70% rise since August, partly down to increased demand from Asia and a drop in supplies from Russia.
A report by energy market consultancy Cornwall Insight last week forecast energy bills could rise as much as 30% next year if, as has been speculated, the energy price cap rises next year from a current maximum of £1,277 to £1,660.
The price cap already rose £139 on October 1 in line with a rise in wholesale costs between February and July this year when economies around the world reopened from Covid.
The cap means those on default tariffs paying by direct debit will see their bills rise £139 from £1,138 to £1,277 from October 1, based on typical usage.
Prepayment customers will see an increase of £153 from £1,156 to £1,309.
Richard Neudegg, head of regulation at Uswitch.com, said: “The Government needs to act quickly to provide better protection for the most vulnerable over the coming months.
“The best advice for most people right now is to hold tight if you’re on a standard variable tariff as it’s unlikely there will be a better value deal to switch to, given the current unprecedented wholesale price situation.
“If you are on a fixed deal that’s coming to an end, for most it’s worth letting your deal roll over onto your supplier’s capped standard variable rate too.
“It’s always important to make sure that you are paying the best possible price based on what’s available, so it’s worth signing up to any alerts that will keep you informed about what’s happening in the market.
“Now is the time to stay clued up on how much energy you are using at home and take any opportunity you can to keep costs down.”
If your supplier collapses, you won’t be left without gas or electricity. Regulator Ofgem says you should take a meter reading and a new supplier will be assigned to you. We’ve got more on your rights here.
What needs to be done to support households? Let us know your thoughts in the comments below
How long could this last?
Europe’s winter heating season typically begins in October and wholesale prices are not forecast to fall significantly during the remainder of this year.
Even then, the price cap is based on the cost of wholesale prices six months ago – so the latest cap factors in how much wholesale prices were in the spring.
The current surge will be reflected in April 2022’s new energy price cap, which will set the bar for the next six months of bills.
That means you should keep a close eye on your bills for at least the next year.