UK energy prices will jump by 13% from July 1 after energy regulator Ofgem on Wednesday raised the price cap as a result of higher wholesale gas prices amid the Middle East crisis.
The UK has a so-called Energy Price Cap in place, which protects households from excessively high bills by capping the price that energy utility providers can pass on to them. The price cap is a limit on what suppliers can charge domestic consumers per kilowatt hour of energy used.
Because of the new energy crisis created by the Iran war, energy prices in Britain will jump between July 1 and September 30, 2026.
“Today’s price change reflects continued volatility in global energy markets,” said Tim Jarvis, Ofgem CEO.
“This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy.”
Thanks to the so-called energy price cap in place, energy bills for a typical household that uses electricity and gas would drop by 7% between April and June, Ofgem said in February in its quarterly energy price cap announcement.
However, a steep rise in the bills was widely expected from July, due to the spike in international gas prices.
Gas still plays a key role in energy supply in the UK despite the government’s ambition to have 95% ‘clean energy grid’ by 2030, including nuclear and renewable power. Gas is a key source of space heating, apart from generating a third of Britain’s power, or much more if wind speeds and wind power output are low.
The current crisis has prompted energy associations and analysts to call on the UK government to boost Britain’s gas storage capacity and support production in the UK North Sea instead of constantly erecting barriers to the oil and gas industry.
By Tsvetana Paraskova for Oilprice.com
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