An energy provider set up to challenge the dominance of the Big Six and now owned by Shell has agreed to compensate thousands of customers after breaching the government’s price cap.

Ofgem has ordered the former First Utility — known since last year as Shell Energy Retail, after it was taken over by the oil and gas group — to repay 8,800 individual customers who were overcharged after the cap came into force in January.

It must also pay tens of thousands in compensation and contribute £200,000 to the regulator’s fund to help vulnerable gas and electricity customers.

The regulator said that 12,000 gas and electricity accounts had been affected by the breach of the rules. Shell Energy Retail will pay a total of £390,000 under the…

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