It was confirmed on 7 November that CNG ceased trading. CNG have been a cornerstone of the UK commercial gas sector for 27 years. With nearly 3 decades of experience in trading gas, even CNG have fallen victim to the global energy crisis.
Many small, and predominantly domestic, suppliers have had to close in recent months. However, CNG are the first major commercial supplier to fall victim to the energy crisis.
So how did a company with nearly 3 decades experience in trading gas, end up in this position?
As well as supplying gas to businesses, CNG also had a wholesale arm where they provided gas shipper services to smaller energy companies, mainly in the domestic market.
A gas supplier needs a licence to sell gas to the end user. But they also need either (a) a licence to transport gas around the network (from storage to site), or they must agree a contract with another shipper to use their services.
Sadly, a lot of these smaller energy companies have been struggling with the soaring coast of wholesale gas and electricity. Unable to cope, many suppliers have had to close. These suppliers also owed large sums of money to CNG (rumoured to be tens of millions of pounds altogether).
A situation, therefore, any company would struggle to survive.
I’m a CNG customer, what should I do?
This now leaves 41,000 business customers looking for a new gas supplier. And at gas prices three or even four times that of their CNG contracts. An unexpected increase in costs such as this will have serious repercussions for a lot of businesses in all sectors. And charities too.
Ofgem have appointed Pozitive Energy as their Supplier of Last Resort. All CNG customers will now be migrated to Pozitive Energy, a process that will take several weeks. During the bidding process, Pozitive Energy and Ofgem will have agreed an initial rate that CNG customers will be charged for their gas from 7 November.
This price will likely be available for a limited period, and then subject to change. Going by recent market movement, it will probably increase.
CNG customers will not be tied into a fixed term contract with Pozitive Energy. They are free to choose their own supplier. However, in extremely volatile market conditions, any price offers are going to be extremely high.
If you are a CNG customer and are looking for impartial advice, you are welcome to call us on 020 3372 6517. We work with around 25 business energy suppliers.
Perfect Clarity help businesses to get better deals for their gas, electricity and water contracts.