Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Taxpayers face £3bn Bulb bill as Russian invasion sends gas prices soaring

Taxpayers face £3bn Bulb bill as Russian invasion sends gas prices soaring

The soaring cost of gas on wholesale markets is expected to send the cost to taxpayers of rescuing Bulb spiralling to as much as £3bn or more, Sky News learns.

British taxpayers are facing a bill for the rescue of Bulb, the collapsed energy company, that could hit £3bn or more after Russia's war with Ukraine sent wholesale gas prices surging to unprecedented highs.

Sky News has learnt that industry executives and government officials now expect Bulb's special administrator to request hundreds of millions of pounds of additional funding within days to keep buying gas to meet customers' needs.

Bulb's insolvency in November involved the Treasury agreeing to provide £1.7bn to enable the company to keep operating on behalf of its customer base of nearly 1.7 million.

While the number of customers using Bulb has fallen slightly since then, the company is still thought to have around 1.5 million users.

Wholesale energy prices have spiked to record levels, with the cost of natural gas for next-day delivery in the UK trading 10% higher today at 515p per therm - more than ten times the level of a year ago.

One executive at a rival supplier said the cost to taxpayers of the Bulb bailout would "easily" hit £2.5bn, was likely to reach £3bn and could rise even beyond that level.

The potential cost of the Bulb process, which is being run by Teneo Restructuring, is soaring so fast because the government had decided that administrators could not hedge purchases of wholesale gas.

A spokesperson for the Department for Business, Energy and Industrial Strategy said on Monday: "The Special Administrator of Bulb is obligated to keep costs of the administration process as low as possible, and we continue to engage closely with them throughout to ensure maximum value for money for taxpayers."

Sky News revealed soon after Bulb crashed into insolvency that Lazard, the investment bank, was being lined up to find a buyer for Bulb.

Consumers were facing higher bills even before the invasion of Ukraine


That process is itself likely to be made significantly more difficult by the wholesale gas price rise.

Bulb, like other suppliers, has been forced to raise prices for consumers, with the industry price cap set by the regulator, Ofgem, rising 50% from April.

Analysts have forecast that it could reach £3000 for a typical household by the autumn.

The surge threatens to present Boris Johnson's government with a seemingly intractable cost-of-living challenge, given the volume of other inflationary pressures affecting consumers in supermarkets and at the petrol pump.

Bulb is the UK's seventh biggest supplier and by far the largest of the nearly 30 to have collapsed since the start of August.

The company was adjudged to have been too large to go through Ofgem's Supplier of Last Resort (SOLR) process - the method by which all of the UK's other collapsed energy companies have been resolved.

In the SOLR process, a company's operating licence is removed and bids are sought from other industry players for its customer base, with losses incurred by the acquirers of those customers then recouped through an industry levy.

Under the special administration regime, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors.

Ofgem has admitted that it made mistakes in permitting too many new suppliers to enter the UK market without being certain of their financial resilience.

Observers expect the watchdog to face a radical overhaul once the current crisis has subsided.

Bulb declined to comment.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×