Keeping Bulb Energy running will potentially cost taxpayers billions of pounds more than is currently being set aside, government officials have said.
Bulb, which has 1.6 million customers, was effectively nationalized in late November when it was placed under special administration as it collapsed amid soaring wholesale gas prices.
In November wholesale prices were around £2 per unit.
Since then the prices have been consistently higher.
They peaked at £4.70 in December and as high as £8 on Monday – 20 times last year’s prices – amid extreme volatility.
When Bulb was placed under special administration, the Treasury committed £1.7bn to purchase the gas needed by the end of the tax year in April 2022, by which time it was hoped a buyer would be found for the company.
Government officials have conceded that the prospect of outsourcing the business to a private buyer seems unlikely in this environment, meaning taxpayers will be on the hook for a gas bill that energy analysts believe could run into billions of pounds.
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A spokesman for the Department for Business, Energy and Industrial Strategy said: “Bulb’s Special Administrator is committed to keeping the costs of the administrative process as low as possible and we continue to work closely with them throughout the process to achieve an optimal price.” -Money to ensure taxpayers.”
Extreme volatility in energy markets has resulted in some customers willing to pay £3,500 a year to settle their energy bills for two years, according to another major energy company.
That’s well above the £1,971 energy price cap that comes into effect in April, but that cap is subject to possible further increases every six months.
Industry analysts estimate the next energy price cap could be set at £3,000 or more from October.
Other energy retailers are reluctant to offer or recommend customers to commit to such high prices, fearing they could be trapped in high tariffs if and when prices return to more normal levels.
Some may be willing to pay a heavy price for reassurance that they know what their spending will be. Millions of customers will simply not be able to afford energy bills later this year – despite the Government’s £9 billion two-tier support package for energy bills.
This offers consumers a £150 tax refund in April and a £200 loan in October, repaid over the next five years at £40 a year.
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