IN RECENT weeks the price of gas has soared resulting in energy suppliers being put out of business and forcing some factories to stop production all together.

Since the beginning of this year the price of wholesale gas has surged by 250 per cent, according to figures released by Oil & Gas UK.

Many people have been left confused as to why wholesale prices have been soaring so dramatically.

Since the pandemic the economy is slowly opening and demand for gas is increasing.

Europe is also about to start entering winter, which is when gas demand will be highest because many countries rely on gas to heat homes.

On top of this supply from Russia has recently dried up and demand for gas is high putting pressure on international markets.

Other factors include many gas platforms in the North Sea were unable to carry out maintenance work during the Covid-19 pandemic, so they are now closed to carry out this work.

Last week cables that import electricity from France were badly damaged, meaning that even more gas has been needed to produce electricity.

There have been questions circulating about what this means, and people have since been wondering whether their energy bills will rise.

Prices were already set to rise for the 15 million households in Great Britain that are on their supplier’s default tariff because of a major hike in the energy price cap.

Regulator Ofgem had been criticised for the rise, which comes into force on Friday, October 1.

Boris Johnson said: “I think people should be reassured in the sense that yes there are a lot of short-term problems not just in our country, the UK, but around the world caused by gas supplies and shortages of all kinds.

“This is really a function of the world economy waking up after Covid-19.”

He said that we must do ‘everything we can’ to try and fix the problem and stressed the importance of making sure companies we rely on don’t go under.

He added: “But this will get better as the market starts to sort itself out, as the world economy gets back on its feet.”

Many energy customers are locked into year-long deals, which will fix their price for the 12 months of the contract. Customers who are on a contract which is coming to an end are likely to have to change to a more expensive deal.

Ofgem has said consumers can expect an average price rise of £135 this winter.

In the recent weeks five energy suppliers have gone out of business many have promised to sell gas to customers for less than it is currently costing them to buy.

When they sign a fixed-term deal, households are promised that they will pay the same price for the gas and electricity they use during that entire period.

Energy suppliers expect the gas price to go up and down and will often give themselves some headroom for rises.

But unprecedented recent price rises mean that a lot of customers are now paying suppliers less for energy than it costs the suppliers to buy that energy.

It is predicted that dozens more could follow by the end of the year.

If your energy supplier does go out of business it is advised that you sit tight and wait for Ofgem to move you to a new supplier.

Take photographs of you meters, and download or print out your bills from the old supplier.

If your energy supplier owes you money, your money is protected and you should get it back.