Gas price rise: Government considering loans for energy firms - BBC News

The government is considering offering emergency state-backed loans to energy companies as firms battle to stay afloat amid surging gas prices.

The process for dealing with failing firms is under pressure as adopting customers has become unattractive for surviving companies due to price rises.

The loans are expected to be offered to encourage firms to take on customers.

"The government has taken their eye off the issue of energy security," he said.

One senior executive at one of the UK's largest energy companies described an estimate that 10 energy companies would survive this as "optimistic".

Several energy suppliers are batting to stay in business, with the UK's sixth largest energy company Bulb seeking a bailout to stay afloat.

The proliferation of new energy retailers, set up to challenge the bigger players, had been considered by past and present governments as a triumph of competition in a competitive market.

The bigger energy providers have the financial resources to take out insurance - or hedge - against the risk of a spike in energy prices.

Industry sources have told the BBC that the insuring positions or "hedges" - the right to buy energy at historic fixed prices - taken out by the bigger players, are now worth as much or more than the big companies themselves.

Senior executives at some of the largest companies said the energy price cap - supported by both Labour and Conservative politicians - had played a part in bringing about the current crisis.

"The price cap is now the cheapest deal in the market and providing new customers with energy at that price is loss making."?

Business Secretary Kwasi Kwarteng has been in intensive talks with energy providers over the weekend and will chair an industry meeting on Monday to explore solutions to a crisis, which is reaching far and wide into the UK economy.