SHELL claimed almost £200m for costs associated with taking on customers whose suppliers had gone bankrupt in 2021, before generating record profits in 2022 on the back of soaring oil and gas prices.

Shell's UK utility business claimed £197m under Ofgem rules for costs linked to picking up 500,000 new customers from five energy suppliers that collapsed due to soaring wholesale gas and electricity prices, The Telegraph first reported.

Ofgem's Supplier of Last Resort (SoLR) rules let utility companies reclaim the costs of taking on customers from collapsed suppliers, in a process that adds those costs to all UK household bills.

The cost of compensating utility com- panies for picking up collapsed firms' customers under Ofgem's rules is set to hit £2.7bn, a recent report by the Public Accounts Committee (PAC) shows.

A sharp uptick in demand for energy following the reopening of the global economy after Covid-19 caused global energy prices to soar in the latter half of 2021. This saw a combined sum of 29 UK suppliers - including Bulb and Ampower - fall into insolvency from the middle of 2021 to 2022, as energy suppliers faced widespread losses. Shell's utility business, Shell Energy, made a £97m loss on picking up the 500,000 extra customers from five of the collapsed suppliers.

(c) 2023 City A.M., source Newspaper