Weekly News Review - 7th November 2022

Octopus Energy to take over collapsed supplier Bulb

Energy supplier Octopus Energy is set to buy its former competitor Bulb, which collapsed last November amid rising gas and electricity prices and has since been run by the government. The sale is expected to be completed this month, following a court hearing on the administration process.

The deal may involve the UK paying Octopus to cover the costs of Bulb, after the supplier reportedly asked the government for £1 billion to cover costs incurred from volatile energy prices. In comparison, Ovo Group had prepared a bid for Bulb which wouldn’t require government money to support it.

There is no change to either Bulb or Octopus customers’ supply arrangements, and Bulb customers have been told their credit balances will automatically get transferred to their new account with Octopus, along with their existing direct debits.

With already more than 2 million customers, Octopus will become the UK’s third largest energy supplier after adding Bulb’s 1.5 million households. The combined numbers would give Octopus a 16% share of domestic energy accounts, behind British Gas (24%) and E.ON (also 16%).

Business Secretary Grant Shapps said the sale “will bring vital reassurance and energy security to consumers across the country at a time when they need it most. This is a fresh start and means Bulb’s 1.5 million customers can rest easy, knowing they have a new energy home in Octopus.”

Greg Jackson, the founder and chief executive of Octopus Energy Group, said: “We take our responsibilities very seriously. We will work unbelievably hard to deliver value for taxpayers and to look after Bulb’s staff and customers.

“We started off as rivals but shared the same mission – driving a greener, cheaper energy system with people at the heart. We know how important this is to Bulb’s loyal customers and dedicated staff, and are determined that Octopus can provide them with a stable home for the future.”

BP and Shell see huge profits due to high oil and gas prices

BP has reported a huge profit for July to September due to high oil and gas prices following Russia’s invasion of Ukraine. The oil giant made $8.2bn (£7.1bn) for the period, more than double the profit over the same three months last year. BP said it will pay $800m in windfall tax this year, a levy on profits made from extracting UK oil and gas.

The windfall tax was introduced by Rishi Sunak when he was chancellor. It is expected there will be renewed calls for this windfall tax on energy firms to be increased following the big profit announcements. At the time Mr Sunak said the levy – which they have called an Energy Profits Levy – would raise £5bn in its first year.

Alok Sharma, UK’s COP president, tweeted: We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”

Treasury sources have indicated that, ahead of the Autumn Statement on 17 November, an extension to the windfall tax is being discussed which will detail plans for tax rises and spending cuts as the government attempts to fill a “black hole” in public finances.

That could include increasing the rate oil and energy companies have to pay on extraordinary profits, extending the timeframe it applies for or expanding it to include electricity generators. The Treasury has warned that everyone will need to pay more tax “in the years ahead”.

Last week, BP’s rival Shell revealed that it had paid no windfall tax in the UK because it had invested millions of pounds. But it said it expected to start paying the levy next year. Shell said global profits reached $9.5bn (£8.2bn) between July and September, compared to $4.2bn during the same period last year. However, because it had made large investments in the UK, it meant it had made no profit here.

While BP is set to pay some windfall tax, it will also give its shareholders a boost by increasing its dividend payment by 10%, and will also spend $2.5bn buying back shares.

Want to talk about how this weeks news affects you?

Get in Touch Today

If you wanted to talk about any of the news items we have shared this week and how it could affect you and your organisation, then get in touch with our teams today.

  • From time to time, we would like to contact you about our products and services, as well as other content that may be of interest to you. If you consent to us contacting you for this purpose, please tick below to say how you would like us to contact you:

  • You can unsubscribe from these communications at any time. For more information on how we use your data, please review our Privacy Policy.

    By clicking submit below, you consent to allow EIC to store and process the personal information submitted above to provide you the content requested.

Our offices will be closed for the Bank Holiday (Monday 29 August 2022).
If you have a query, please contact us from Tuesday 30 August onwards, and we
will be happy to deal with your query then.