An energy firm challenging the Big Six has gone under because of rising prices

 
Lynsey Barber
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GB Energy has ceased trading
GB Energy told customers the business has become untenable (Source: Getty)

Rising energy prices have forced a small supplier attempting to challenge the Big Six energy firms to cease trading.

GB Energy alerted its 160,000 customers late on Saturday that the company had ceased trading due to rising wholesale prices.

In a note to customers the firm said:

"Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable and as such we will now be entering a process overseen by Ofgem to move you to a new supplier."

Nearly all the Big Six firms - British Gas, E.On, EDF, npower, ScottishPower and SSE - have been forced to hike the price of some tariffs, as have smaller firms.

The disappearance of the supplier is a blow for challengers, which have been encouraged by the competition watchdog to encourage greater choice for consumers outside the Big Six.

Recent figures suggest the number of customers signing up for both gas and electricity from smaller suppliers is growing at an average rate of nine per cent per quarter.

GB Energy customers will be protected by the energy regulator Ofgem and they will be moved over to new suppliers with guarantees on any credits.

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