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Two more British Energy suppliers cease trading

Two more British Energy suppliers cease trading
Two more British Energy suppliers cease trading   -   Copyright  Thomson Reuters 2021
By Reuters

By Susanna Twidale

LONDON -Two more British energy suppliers have ceased trading, regulator Ofgem said on Wednesday, taking the total number of firms to go bust since the beginning of September to 11 as companies struggle with record wholesale energy prices.

Pure Planet, in which oil major BP holds a stake of about 24% and which has around 235,000 customers, and Colorado Energy, with 15,000 customers, have exited the market.

Many British energy suppliers have struggled with the soaring wholesale gas and electricity prices while the amount they are able to charge customers is limited by regulator Ofgem’s price cap.

“In our case, despite being hedged until next spring, and having had the backing of BP, Pure Planet faced increasing risks and large potential losses by continuing to operate in this market,” Pure Planet said in a statement.

“Sadly, this led to BP taking a decision to withdraw its support and we are no longer able to continue.”

No-one from BP was immediately available to comment.

Britain’s domestic price cap rose 12%-13% from Oct. 1 but wholesale prices have risen significantly since that announcement was made in August.

Analysts have said the difference between wholesale energy prices and those suppliers are now allowed to charge is around 400 pounds ($545) per customer.

Nine suppliers went bust in September and Britain’s energy minister Kwasi Kwarteng last week said more companies could collapse but ruled out providing support for struggling energy firms.

($1 = 0.7329 pounds)