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Four other British energy providers go bankrupt because of high gas prices | Energy industry

Another four utilities have gone bankrupt in a single day as historic gas market highs continue to break through the UK energy market amid new fears that Russia may cut gas supplies to Europe.

Energy regulator Ofgem said the collapse of four small utility companies on Tuesday would result in about 24,000 households in need of a new supplier and the total number of bankrupt energy companies would rise to 17 since early September, affecting more than 2 million households.

The spate of outages follows skyrocketing global energy market prices due to a sudden surge in gas demand as economies began to shake off restrictions related to the Covid-19 pandemic. Gas markets have hit record highs in the past few weeks, leading to one of the biggest spikes in home energy bills and fears of a cost of living crisis this winter.

Of the four British victims, Zebra Power had the largest customer base, supplying 14,800 households with energy. Omni Energy served approximately 6,000 domestic prepaid customers while AmpowerUK had approximately 600 UK customers and a further 2,000 overseas households. MA Energy had around 300 foreign customers.

Numerous more utilities are expected to collapse in the coming months as gas markets remain at near record highs and suppliers are forced to bear the higher costs without raising their tariffs above the regulator’s energy price cap.

Consumer advocacy group Citizens Advice said struggling households would end up paying the price “with uncertainty, inconvenience and ultimately higher bills” as suppliers “continue to fall like dominoes”.

Gillian Cooper, Head of Energy at Citizens Advice, said, “Over the past week Ofgem set out how it intends to ‘raise’ the bar on supplier standards and improve their resilience in the short term. This is a positive step, but it is clear that the existing rules and their enforcement were not enough. “

Cooper added, “In the longer term, Ofgem will have to do more to ensure that the companies are financially sound and have good customer service. This also includes protecting people from the loyalty penalty that allowed companies off the cap to benefit from those who did not or could not change. “

The energy regulator last week tabled plans for “bold action” to accelerate changes to its price cap, which protects around 15 million households from unfair energy bills, after increasing calls on providers to make the cap more flexible to allow for market increases can be sent to households earlier.

The price cap revision came amid mounting concerns that gas prices, more than three times higher than last year, could continue their upward trend as temperatures plummet across Europe and Russia throttles gas exports to Europe.

Gas flows from Russia’s state-owned gas giant Gazprom, which supplies about a third of Europe’s gas, declined significantly over the weekend, and on Tuesday the company declined to offer additional gas supplies to Europe from January, when demand for the gas is often at its peak in winter.

The slowdown in gas exports, despite a direct instruction from Russian President Vladimir Putin to Gazprom to focus on filling its European gas storage facilities from November 8th, when Russian domestic storage facilities are to be filled, has rekindled fears among energy suppliers for the winter.

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Russia’s decision not to open its gas taps to allow additional supplies to Europe from January also contradicts demands by the global energy regulator, the International Energy Agency, which said last month Russia should help bring market prices down by doing this this winter boosts gas exports to Europe.

Moscow has denied holding back gas supplies from Europe via its pipelines through Ukraine and Poland in order to put pressure on German regulators to authorize gas supplies via the new Nord Stream 2 pipeline across the Baltic Sea to Germany.

But his decision to deliver only contracted quantities despite strong demand for additional gas shipments is likely to raise gas market prices across Europe and help Russia charge more for its hydrocarbon exports.