Make Kitco Your Homepage

German energy retailer Otima declares itself insolvent as energy crisis bites

Kitco News

FRANKFURT (Reuters) - Otima Energie, a small German power and gas retail company, on Wednesday declared itself insolvent, the latest victim of soaring energy prices, while E.ON, Entega and EnBW temporarily withdrew their gas deals from price comparison portal Verivox.

Suppliers across Europe are struggling with rocketing prices due to factors ranging from insatiable Asian demand to Europe’s carbon policy and a period of lighter winds.

In Britain nine power suppliers collapsed in September alone and on Wednesday Bohemia Energy, one of the biggest electricity and gas suppliers in the Czech Republic, halted operations.

Otima from Neuenhagen near Berlin said it had stopped delivering power at the close of business on Oct. 11, blaming an extreme rise in wholesale market prices which raised the cost of advance purchases and financial down payments. It added that one of its own suppliers had stopped deliveries to the company.

Under German law Otima’s customers will continue to receive energy, with the biggest retailer active in their region putting them on a general tariff which can be high but is renegotiable.

Power prices for typical households have risen by 9.3% in the last twelve months to a record high in October of 1,255 euros ($1,452.04) per year, Verivox said in a note prepared for Reuters. Annual retail gas supply contracts had leapt 28.2% percent year-on-year to 1,402 euros in October, it added.

Verivox said that E.ON, south-western EnBW and public sector-owned Entega in Hesse had asked it to temporarily delist their gas offers from its price comparison site while they recalculated prices.

Entega and EnBW confirmed this was the case while adding that direct customer applications outside the portal, which takes a commission, would be accepted.

E.ON on Tuesday said it has temporarily suspended new residential gas customer contracts.

On Sept. 24, Lower Saxony firm DEP stopped supplying gas and power to customers.

($1 = 0.8643 euros)

Reporting by Tom Kaeckenhoff and Vera Eckert, editing by Kirsten Donovan

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.