Octopus Energy asks government for £1bn to buy Bulb

Image source, Getty Images

In order to take over Bulb from the UK government, the energy company is seeking $1 billion in taxpayer funding.

Bulb went bust last year and is currently being run by the state.

Bulb would pay more than £100m for customers as well as entering a profit-sharing deal with the government if a package of funding, funding and deals is agreed.

Due to commercial sensitivity, the government refused to comment.

The state's rescue of Bulb is expected to cost the taxpayer over 2 billion dollars. The Office for Budget Responsibility said in March that there was still uncertainty about the final cost.

Sky News reported that the extra money was going to be paid back in full over time.

It would be used to purchase energy ahead of time.

The energy company didn't say anything.

Russia's war in Ukraine and the Kremlin's decision to reduce energy supplies to Europe have caused the price of gas to jump.

Ofgem has not been hedging its purchases of wholesale energy which has led to higher costs.

Millions of UK households are bracing for an increase in energy bills later this year.

The average household was expected to see an £800 increase in energy bills. Cornwall Insight, an energy industry analyst, said that the typical domestic customer was likely to pay more from October.

Bulb was one of more than 30 energy companies that went out of business last year.

Bulb, with 1.6 million customers, was the biggest firm to go bust, but Ofgem estimates that the cost of all the other energy companies that went bust could be more than double that. The cost of transferring failed customers to new firms is included.

According to the National Audit Office, the government has already spent almost one billion dollars on Bulb.

Bulb filed for administration last year and if a deal is agreed, it would boost the customer base of Octopus.

Households in England, Scotland and Wales will receive $400 to help with rising fuel bills.

The two leadership candidates have promised to reduce household energy bills.

The foreign secretary said she would temporarily axe green energy taxes, which would save around £153 per year, while the former chancellor promised to cut VAT on bills.