UK energy crisis worsens as middleman’s exit reverberates

UK energy crisis worsens as middleman’s exit reverberates

The dramatic exit from the UK gas market of a middleman that supplies the fuel to utilities is already reverberating through the industry.

Xcel Power Ltd., a small retailer to businesses, warned Thursday it’s likely to fold after the company it buys gas from — CNG Group Ltd. — said it would stop supplying the fuel. It’s the latest escalation in a crisis rocking the industry, with weeks of record prices already pushing more than a dozen suppliers out of business.

“It’s not worth carrying on now,” Zafar Nicod, who runs Xcel in Derby, England, said in an interview. He estimates he’d need to stump up 500,000 pounds ($685,000) in collateral to continue trading and then secure a new shipper, which would probably mean higher prices.