Small energy suppliers in the UK are going out of business as natural gas and power prices reach record highs across Europe.
The gas and electricity suppliers Pfp Energy and Moneyplus Energy will have their 94,000 customers transferred to a new supplier, U.K. energy regulator Ofgem said in a statement Tuesday. They follow Hub Energy, another power provider that announced last month that it was exiting the market.
Smaller domestic energy suppliers may have limited capability to hedge power and gas prices, leaving them vulnerable when prices suddenly increase. That means they may end up selling to customers at lower prices than they have to pay in the market.
Pfp and Moneyplus didn’t immediately respond to requests for comment.
Benchmark gas prices in the UK surged to a record Tuesday amid a wave of higher prices sweeping across Europe due to a lack of supply. Some UK energy companies are announcing price increases ahead of the winter season when many residents rely on the fuel for heating.
Day-ahead power prices in the UK are more than double the average from the last five years.
Energy retailer Igloo Energy Supply Ltd last month said it would raise prices for the second time in as many months to cope with surging gas prices. Millions of customers will see their bills go up this winter after the energy regulator raised a cap on prices.