The cost of bailing out the British company, which has about 1.4 million customers, has escalated as wholesale gas prices have risen since Russia’s invasion of Ukraine. The Office for Budget Responsibility said in March that the bailout would cost £2.2 billion over two years. Consultancy Auxilione predicts Bulb could lose a further £420m in the six months to October, when households use less energy, and £1.6bn during the colder winter months. Bulb is in special administration overseen by the UK government and is being run by restructuring firm Teneo. The government refused to allow it to hedge – where companies buy energy at a fixed price for a certain period – exposing it to rising gas prices. Bulb was one of 29 suppliers to collapse during the energy crisis, with many trapped by steep price rises combined with a lack of hedging. Auxilione director Tony Jordan told the Financial Times that the government was “paying a high price for the lack of hedging and the costs could rise even further if gas prices continue to soar”. Bulb was considered too big to fail and the government stepped in to handle its management. However, it has yet to find a buyer, with only Octopus, the UK’s fourth largest supplier, still interested in a deal. Octopus has offered to take over Bulb’s customers if the government buys gas and electricity upfront at a cost of £1bn, the FT reported. Octopus has also offered terms under which it would share the profits of Bulb customers with the government if they become profitable. Octopus CEO Greg Jackson declined to comment on the report. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Wholesale gas prices soared again on Monday – with the UK next month price up 16% to 535p. Russian state energy company Gazprom said on Friday – after financial markets were closed – that it would cut gas supplies to Europe through the main Nord Stream 1 pipeline for three days at the end of the month. Unscheduled maintenance of the pipeline under the Baltic Sea will take place from 31 August to 2 September. Industry watchers fear Russia will not restore supplies to Europe, forcing countries to cut gas consumption and risking a recession in Germany, which relies on Russian gas imports. Britain’s energy crisis is expected to deepen this week when regulator Ofgem announces the level of the industry’s price cap, which will be introduced in October. It is set to rise from £1,971 to £3,582. Dale Vince, founder of supplier Ecotricity, said Britain’s energy supply system is “broken” and consumers should not have to pay for the cost of supplier failures on their bills. He told BBC Radio 4’s Today programme: “This problem predates the Ukrainian war. We have a systemic failure in the energy market. the government must intervene. We should not expect customers to pay the cost of this failure and the Ukraine war.” Jackson called energy retailers a “no-profit zone.” He said: “You can’t expect energy customers or retailers to bear the cost of a war.” Jackson said gas prices are nine to 11 times higher than normal. “If this was beer, we’re talking about the wholesale price of £25 a pint,” he added. Vince supported the idea of a deficit fund, which energy suppliers have proposed to the government. Under the plan, energy bills would be frozen and suppliers would be able to access a fund to cover wholesale costs, which would be paid back over 10 to 15 years.
