Alan Brown, the SNP’s MP for Kilmarnock and Loudoun, believes the Government needs to step in to shield the least wealthy from the impact of spiralling prices, emphasising that firms are guaranteed to pass costs on to consumers. It comes as Scottish Power Chief Executive Keith Anderson claimed Britain’s energy market faces an absolute massacre which could force at least 20 more suppliers into bankruptcy in the next month alone unless the Government reviews the energy price cap.
Mr Brown, who heads up the APPG on Energy Costs, was speaking before Bulb energy became the latest company to hit the skids, with energy watchdog Ofgem suggesting it could go under as early as next week.
Bulb is the UK’s seventh-biggest energy supplier, which has an estimated 1.7 million household customers.
If the company does go out of business, it will suffer a similar fate as companies including Avro Energy, Green Network Energy and People’s Energy, all of which have gone out of business this year.
However, he added: “The risks though are ever-increasing costs and pressure on Ofgem to continue raising the cap.
“Also, every time a company goes under, any additional costs are picked up by all energy users through levies on our bills.
“Customer credit is protected when a company goes under which is good.
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“They are making more money from oil and gas revenues than forecast and more money off petrol duties.
“They should re-circulate this unexpected windfall to help those in need.”
Bulb – launched six years ago by Amit Gudka and Hayden Wood – has since built up a six percent share of the market.
It comes as Scottish Power Chief Executive Keith Anderson claimed Britain’s energy market faces an absolute massacre which could force at least more 20 suppliers into bankruptcy.
Speaking earlier this month, Mr Anderson told the Financial Times: “There is a significant risk you could see the market shrink all the way back to five to six companies.
“We expect, probably in the next month, at least another 20 suppliers will end up going bankrupt.”
Natural gas prices have spiked this year as economies reopened from COVID-19 lockdowns and high demand for liquefied natural gas in Asia pushed down supplies to Europe, sending shockwaves through industries reliant on power.
Around 13 British suppliers have collapsed in recent months, forcing more than two million customers so far to switch providers.
Prior to the crisis, there were more than 50 small- and mid-sized independent energy suppliers in Britain with a roughly 30 percent share of the market.
Scottish Power, owned by Iberdrola, is Britain’s fifth largest energy supplier with around eight percent of the domestic gas supply market, according to data from regulator Ofgem.
Speaking on Friday, a Bulb company spokesman said: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”