LONDON—The U.K. government is considering measures to soften the fallout from a sharp increase in energy prices that has put power suppliers to consumers out of business and stoked problems for a range of industries from steel to brewing and fertilizers.

Natural-gas prices across Europe have surged as economies bounce back from the pandemic at a time when stores of the fuel are low and Asian demand is strong.

The...

LONDON—The U.K. government is considering measures to soften the fallout from a sharp increase in energy prices that has put power suppliers to consumers out of business and stoked problems for a range of industries from steel to brewing and fertilizers.

Natural-gas prices across Europe have surged as economies bounce back from the pandemic at a time when stores of the fuel are low and Asian demand is strong.

The prices of natural gas and electricity are intertwined. A drop in wind speeds in recent weeks has led European countries to draw more power from gas- and coal-fired plants. Exacerbating the situation in the U.K., a fire on a subsea cable to France limited the amount of electricity the country could import from the Continent.

Prices rose again Monday after Russia’s Gazprom PJSC booked less space on westward gas pipelines to Europe than traders had expected. Futures for gas to be delivered in the Netherlands in October, the regional benchmark, jumped almost 12% to €72.88 a megawatt-hour, the equivalent of $62.14 and the highest level in figures dating back to 2013. Prices in the U.K. are more than three times those in Germany and France, according to commodities-data firm ICIS.

As prices surge, the British government is considering state-backed loans to large utilities that take on customers from smaller energy companies that have collapsed and it may subsidize fertilizer production, according to a U.K. official, following the temporary closure in the U.K. of two fertilizer plants, which use gas as a feedstock,

Kwasi Kwarteng, the country’s business minister, met with senior figures from Britain’s energy suppliers, including Électricité de France SA and Royal Dutch Shell PLC, over the weekend and on Monday, a spokeswoman said.

The higher prices have already led to four British energy suppliers, which buy wholesale and supply consumers, going out of business, according to Ofgem, the country’s energy regulator.

Many gas customers are on fixed tariffs, meaning that their supplier has to absorb the higher price. The U.K. government also has imposed a cap on energy prices for 15 million households, limiting the extent to which suppliers can feed higher wholesale prices through to customers. Many smaller companies in the sector also failed to hedge their input costs, analysts said, leaving them unprotected when gas and power prices leapt.

“It is too early to say whether any financial support will be necessary, but we are monitoring this situation extremely closely,” the spokeswoman for the Department for Business, Energy & Industrial Strategy said.

The effects of high prices are already fanning out into industry.

CF Industries closed a fertilizer plant in Ince, U.K., last week in the face of rising costs.

Photo: Anthony Devlin/Bloomberg News

Make UK, a manufacturing trade group, said that around two-thirds of British manufacturers were feeling the impact and that some steel producers have halted production for periods of the day due to the high electricity prices.

Typically, energy costs will be around 10% to 15% of the cost of making a metric ton of steel.

Business owner Peter Davies said his U.K.-based steel companies are currently on three-year fixed energy contracts, but they end at the start of next year and he is beginning to get nervous.

“It is all starting to be a bit of a storm,” said Mr. Davies, the co-founder of Original Steel Services Ltd.

The higher prices are affecting businesses across Europe, with trade bodies complaining to governments that the extra expense comes at a time when companies are facing inflationary pressures elsewhere as commodity prices rise and because of transport problems in the U.K. and world-wide.

The higher prices pushed two large fertilizer manufacturers, Norway’s Yara International AS A and CF Industries Holdings Inc., of the U.S., to close plants in Europe last week. Mr. Kwarteng met with CF Industries Chief Executive Tony Will on Sunday, his spokeswoman said.

The closure of the plants will have a knock-on effect on industries that use the carbon dioxide that is a byproduct of fertilizer production.

Carbon dioxide is used to stun animals before they are slaughtered, and any shortage will cause problems for meat providers. The gas is also used in the vacuum packs that store meat and other goods and for dry ice that keeps food cool.

The British Meat Processors Association estimates that its members have less than 14 days’ supplies of the gas.

Brewers are also concerned about a lower supply of carbon dioxide, which they use to produce gas in beer and clean oxygen from their tanks.

Greg Hobbs, head brewer at Five Points Brewing Co., said his London-based company has already been struggling with gas supplies due to widespread supply-chain issues. Transport on sea, rail and road is currently gummed up around the world, after Covid-19 left ships out of sync and caused workers to stay at home.

“This news is not good at all,” he said of the closure of fertilizer plants.

—Joe Wallace and Max Colchester contributed to this article.

Write to Alistair MacDonald at alistair.macdonald@wsj.com