Avro Energy and Green stopped trading on Wednesday, meaning 830,000 customers will have to be moved to other energy suppliers.
Avro Energy was supplying gas and electricity to around 580,000 homes, while Green had 255,000 domestic customers and a small number of non-domestic customers.
Their respective market share was 2% and 0.9%.
Ofgem said the customers will continue receiving energy and outstanding credit balances of domestic customers will be protected. They face higher prices when moved to a new company, however they will still be helped by the price cap.
Green’s boss, Peter McGirr, told the BBC it was unfair that US fertiliser firm CF Industries received taxpayer money to restart CO2 production in the UK, as the food industry was in shortage.
“Why do they need a bailout and we don’t?” he said, adding that the company had done nothing wrong as a supplier.
“You will see larger suppliers feeling the pain as well and they will come cap in hand for a bailout,” he commented.
The chief executive of Ofgem already warned that the rocketing gas prices may last for longer than expected, affecting customers and suppliers alike.
“It’s not unusual for suppliers to go out of the market. I think what is different this time is that dramatic change in the costs that those suppliers are facing,” Jonathan Brearley said on Wednesday.