The supply of electricity and gas was the responsibility of the state until 1986 when Margaret Thatcher privatised British Gas. Four years later the rest of the electricity industry was privatised and now there are dozens of companies providing energy to families and businesses in Britain.
Business Minister Kwasi Kwarteng is preparing for talks with key energy industry bosses, including the CEOs of Centrica, E.On and EDF as UK customers face a surge in prices which experts say has been caused by a rise in gas prices.
Industry group Oil & Gas UK said the wholesale price of gas had risen a whopping 250 percent since January and was up 70 percent in the last month alone.
With many companies having already guaranteed low prices, the rise in wholesale prices have sunk them.
[Good graph here on link]
Several smaller and medium-sized energy suppliers, such as PfP Energy, MoneyPlus, Utility Point and People’s Energy, have been forced out of business and the UK’s sixth biggest energy company, Bulb, is seeking a government bailout.
Mr Kwarteng has said the government is "reluctant" to bail out smaller companies but wants their customers to be auctioned out to those suppliers who can provide the lowest prices.
It was reported on Monday, 20 September, that the government is considering giving loans to some energy companies to help them through the crisis.
In January there were 70 energy suppliers in the UK but analysts say conditions in the industry are so difficult there could be less than a dozen left by the end of the year.
Greg Jackson, chief executive of Octopus Energy told the BBC: "This is the most extreme energy market in decades" and there are “millions of customers and thousands of people whose jobs are going to be affected."
So why are wholesale gas prices rising so fast and why is it such a problem for Britain?
In April the International Energy Agency predicted there would be a 3.2 percent rise in global demand for gas.
The UK government’s own website says: “As the world comes out of COVID-19 lockdowns and economies reopen, we are seeing an uptick in global gas demand this year.”
That increase has been accompanied by some maintenance issues at several UK gas refineries and several other supply-side factors.