Customers with collapsed firms are being transferred to different companies but will face higher bills (Picture: Getty/Metro.co.uk)
Four more energy firms could go bust this week with their customers transferred to higher tariffs.
It is understood the companies have already begun talking to the regulator Ofgem and announcements on their future could come as early as Wednesday.
After a torrid autumn so far, Sky News reported the industry is bracing itself for further collapses.
It would take the number of energy companies that have gone out of business this year to 16 after nine collapsed last month alone.
A huge hike in wholesale gas prices is causing chaos in the industry, with firms restricted from passing rising costs on to customers by the energy price cap.
The Government has so far refused to bail out firms facing collapse but customers are being protected by the ‘supplier of last resort’ system.
This involves Ofgem transferring customers to a new supplier while guaranteeing that any credit on their account is protected.
Larger companies including British Gas, E-On and EDF Energy have taken on most of the 1.7million customers affected since the start of August.
12 companies have gone bust already this year (Picture: Metro)
But bills have gone up by hundreds of pounds because the deals they enjoyed with a previous supplier are no longer available.
The energy price cap rose to £1,309 at the start of this month, and it’s expected to be hiked again when it is next reviewed in April 2022.
Avro Energy, with 580,000 customers, was the biggest supplier to collapse so far but there have been warnings that even major firms are vulnerable.
The gas crisis is affecting consumer customers as well as domestic households with some energy-intensive businesses warning it may no longer be economical for them to carry on if prices rise higher.
Households face higher costs when the energy price cap lifts in the spring (Picture: Shutterstock)
Yesterday, London Mayor Sadiq Khan said the Government should intervene and support businesses hit by the surge in gas prices.
He said many businesses are facing ‘the perfect storm’ of rising bills just as they recover from the coronavirus pandemic, during which many ‘just kept their head above the water’.
‘The Government needs to step in and help because actually if they don’t step in and help, many of these businesses will go bust and it’ll be more expensive for the Government to then be contributing towards benefits to those staff who lose their jobs,’ Mr Khan said.
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