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Energy prices set to climb as war disrupts global supplies
British households will face a 13% increase in energy bills starting in July, driven by soaring wholesale costs linked to the US-Israel conflict with Iran, regulator Ofgem announced.
Impact on households
A typical dual-fuel household will pay an additional £221 annually, bringing the average yearly bill to £1,862. The rise translates to an £18 monthly increase, with gas costs jumping 24% and electricity prices climbing 5%. Standing charges remain largely unchanged.
The price cap affects 33 million homes in England, Scotland, and Wales on variable tariffs. Those on fixed-rate plans will not see changes until their contracts expire.
Global factors behind the spike
Wholesale energy prices have surged after Iran effectively blocked the Strait of Hormuz, a critical shipping route for one-fifth of the world's oil and gas. The conflict has pushed global gas prices up by 25%, directly influencing the July-September price cap.
Ofgem's chief executive, Tim Jarvis, acknowledged concerns but noted that summer energy use typically declines. He advised households to explore fixed tariffs or adjust payment methods to manage costs.
Government and industry responses
The UK government is developing targeted support for vulnerable households if winter bills remain high. Energy Secretary Ed Miliband called the increase "deeply unwelcome" and reiterated that easing financial pressure is a top priority.
"The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that's why easing that burden is our number one priority."
Ed Miliband, UK Energy Secretary
Consumer strategies to mitigate costs
Experts recommend revisiting energy-saving habits, such as lowering thermostats, shortening showers, and improving home insulation. Some households, like Julie Clague in Derby, have adopted creative solutions, including electric blankets and solar panels, to reduce reliance on grid energy.
Community initiatives, such as YES Energy Solutions, provide free packs with tools like radiator keys and draught-proofing materials to help residents cut consumption. Duncan McCombie, the organisation's chief executive, urged households to assess whether further adjustments are possible.
Broader context and concerns
Despite the increase, current bills remain below the peak of the 2022-23 energy crisis, which was partly triggered by Russia's invasion of Ukraine. However, households are still paying roughly £600 more annually than pre-crisis levels.
Energy UK, representing suppliers, warned that bills remain unaffordable for many. Deputy director Ned Hammond highlighted the UK's vulnerability to global price shocks due to its reliance on gas imports.
"It's another unwelcome reminder - coming too soon after the last one - of how our country's high dependence on gas leaves us exposed to price spikes we can do nothing about resulting from conflicts thousands of miles away."
Ned Hammond, Energy UK
Suppliers offer support measures, including repayment plans and payment breaks, for customers struggling with unpaid bills. Ofgem has also adjusted its "typical" energy consumption estimates downward to reflect improved efficiency and reduced usage amid high costs.
