An energy firm with 160,000 customers has ceased trading, blaming recent rises in energy prices.

In a statement, GB Energy Supply said that as a "small supplier" business had "become untenable", but assured people their supply would not be affected.

Ofgem said it would appoint a new supplier and stressed that outstanding credit balances were protected.

The energy regulator advised customers to take a meter reading and wait until their new supplier contacted them.

In a letter to customers on the GB Energy Supply website, managing director Luke Watson said: "Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable."

BBC business correspondent Joe Lynam said that although crude oil prices had almost doubled since the start of the year to just under $50 per barrel, that was still less than half the price seen in 2014.

Many industry watchers expected the cost of heating our homes to rise next year owing to global prices and a weaker pound, he added.

Protections in place

Rachel Fletcher, Ofgem's senior partner for consumers and competition, said: "If you are a customer of GB Energy Supply there is no need to worry as we will ensure your energy supplies are safe.

"Ofgem are actively working with the industry to ensure your transition to a new supplier is as smooth as possible. While this process is under way our advice is not to do anything as you can continue to rely on your energy supply as normal," she said.

Citizens Advice has assured customers of the Preston-based company not to worry.

"This shouldn't affect their gas and electricity supply so they'll still be able to heat and light their home as normal," said director of energy, Victoria MacGregor.

"The energy regulator Ofgem is finding a new supplier for GB Energy Supply customers. The new supplier will contact customers in due course."

No exit fees will be charged as a result of the closure, but Ofgem said it would be down to customers to tell their new supplier they wanted to be put on the cheapest deal.

Customer reaction

Speaking to BBC Breakfast, Rob Salter-Church from Ofgem stressed that there was "no need to worry" and that the regulator was not aware of any other suppliers in the same position as GB Energy.

He said Ofgem had protection in place for when these things happen, so customers can be reassured they are protected.

Moneysavingexpert.com founder Martin Lewis warned: "Be prepared that in most cases the new tariff will be more expensive than what you are on now - cheap fixes will probably not be honoured - so do a comparison and switch once the transfer happens if the new tariff is not cheap."

GB Energy customers contacting the BBC had mixed views about their situation.

Keith Callaghan, from near Ipswich, praised the tariffs and customer service. "I was very happy being one of their customers. I have changed supplier twice before finding GB Energy, and planned to stay with them," he said.

Georgina Davidson, from Kent, said she had over-paid more than £230 to GB Energy and was hoping to get money back in time for Christmas. "Now I'm just in bits," she said.

And Dean Morris, from east Yorkshire, said he had just switched his elderly mother-in-law to GB. "Now I have to ensure she is not ripped off by a new supplier. No notification from GB Energy... I'm really disappointed."

Customers can find more information on the Ofgem website.