Rising energy prices continue to do particular harm in the UK. The country’s energy market is facing an “absolute massacre” that could bankrupt at least 20 suppliers in the next month alone, warns Keith Anderson, executive director of Scottish Power, a Scottish firm owned by Spain’s Iberdrola.
Natural gas prices have skyrocketed this year as economies reopened following COVID-related shutdowns and high demand for natural gas in Asia has pushed supplies to Europe down, causing a shock to global markets. industries that depend on cheap energy.
“We hope that, probably in the next month, at least 20 other marketers end up going bankrupt,” Anderson warned in Sky, pick up Reuters. “Now let’s start to see how some relatively well-run, good, and commercially sound companies are going bankrupt because they just can’t pass the cost of the product on to customers. “
“There is a significant risk that the market will shrink to five or six companies,” Anderson warned in turn. Financial Times, emphasizing that the only solution is for the British Government to review the limit on energy prices
The price cap, set by regulator Ofgem, limits the cost of energy for some 11 million people with default rates from suppliers and is reviewed twice a year. Anderson insists that Ofgem and the Government of Boris Johnson should study the possibility of changing the cap before their next review, scheduled for April, so that suppliers can pass their cost increases earlier. Without government and regulator intervention, “we run the risk of sleepwalking into outright slaughter,” Anderson reiterated.
From Ofgem, informs Bloomberg, have indicated that the suppliers’ customers will be transferred to new companies, although finding a replacement is increasingly difficult as most suppliers have already acquired additional customers and are beginning to be on edge.
The collapse of British energy suppliers Pure Planet and Colorado Energy, backed by BP and which together serve some 250,000 customers in the UK, raised a week ago to 14 the number of marketers that have been forced to cease their activity as a consequence of the rise in gas prices and the ceilings on prices imposed by the Government as it cannot balance its costs. The number of affected customers now exceeds 2.4 million and the number of companies that have ceased their activity has risen to 11 since September.
To date, the biggest victim of the crisis unleashed in the UK by high gas prices has been Avro Energy, which served some 580,000 customers and announced the cessation of its activity on September 22. The UK’s business secretary, Kwasi Kwarteng, has already put the worst of it, warning that more suppliers are likely to go out of business.
Examples are rife throughout British economic activity. A rail freight operator in the country has revealed that it is returning to diesel trains because electricity costs have become too expensive. Although oil has also risen strongly, the company appears to be compensating. Gas is trading at a price equivalent to almost $ 200 in barrels in the UK, causing energy prices to rise 268% this year. By contrast, the benchmark diesel price in Europe looks cheap as it has reached a three-year high of $ 98 per barrel.