Taxpayer bill for Bulb could top £1bn as energy prices soar
Running failed energy supplier Bulb could could cost taxpayers over £1bn as the price of gas continue to rocket, according to reports.
Bulb was left to shoulder the spiralling cost of gas after administrators were instructed, at short notice, by the government to buy most of its wholesale energy needs, sources told The Times, which first reported the news.
The government set aside £1.7bn to allow Bulb to continue supplying energy to its customers as it tumbled into administration last month.
The company was put into special administration so it could continue to run and provide energy for its 1.6 million customers.
The price of gas shot up again yesterday, with benchmark UK month-ahead prices up over a fifth at around 450p a therm last night.
Analysts at investment bank Investec yesterday warned that the energy crisis will extend into the new year, with UK households facing a “painful” £700 increase in their energy bills.
The capped bill for average use could rise from £1,277 to £2,000 when the market regulator reviews the current limits next April, analysts estimated.
The potential increase in the consumer price cap compounds the financial pressures facing UK households.
Alongside rising national insurance costs and surging inflation, Investec previously revealed that carnage across the UK energy industry combined with the de-facto nationalisation of Bulb – would leave UK energy consumers on the hook for a £3.2bn bill.
Wholesale costs have risen five-fold since the start of the year, with 25 UK energy firms collapsing in the past three months alone – directly affecting four million customers.
Sunken suppliers have pointed the finger at the consumer price cap – with Bulb Energy revealing in its administration announcement that the current cap restricted charges to consumers to 70p per therm, even though spiralling wholesale charges meant it cost £4 per therm to supply gas.