Energy bills to rise due to gas price volatility linked to Middle East war: comment

Under Ofgem's energy price cap for July to October 2026, the typical dual fuel bill will rise by around £220 [1]. This is largely due to increases in energy prices as a result of the war in the Middle East causing oil and gas price volatility globally [2], with electricity prices in the UK still set by gas around 60% of the time [3].

Commenting, Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), said: "Bills rising once again shows just how exposed British households are to volatile international gas markets which set the price we pay in the UK. When conflict drives up fossil fuel prices - whether it’s in Ukraine or now conflict with Iran - it’s families here who end up footing the bill.
 
This isn’t inevitable. Some Australian households are seeing bills fall by as much as 10% as renewables and batteries take a bigger share of the system [4]. In Spain, where there’s a high share of wind and solar, power prices are consistently lower because they’re not as tied to global gas markets [5]. Here in the UK, more and more households are already trying to shield themselves from that volatility - installing net zero technologies like rooftop solar, batteries, and switching to electric vehicles to take control of their energy.
 
Renewables are starting to insulate wholesale electricity prices from these spikes, but unless we make the shift to electric heat pumps, British homes will become ever more dependent on foreign imports to try to keep warm in winter."

Ofgem has announced a change to its definition of an ‘average household’ by lowering its typical domestic consumption values (TDCV) which essentially estimate how much gas and electricity a typical household uses [6]. This change reflects that average household energy use has fallen, partly in response to sustained high energy prices, and improvements from energy efficiency.

ENDS

Notes to editors: 

1. Ofgem: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap-unit-rates-and-standing-charges

2. Cornwall Insight: https://www.cornwall-insight.com/press-releases/cornwall-insight-release-final-july-price-cap-forecast-2/

3. HM Government: https://www.gov.uk/government/news/decisive-action-to-break-influence-of-gas-on-electricity-prices. The amount of time that gas sets the price of electricity is falling as more renewables are built, shifting older and more expensive gas plants off the marginal pricing curve. Just a few years ago, gas set the electricity price around 98% of the time.

4. The Guardian: https://www.theguardian.com/australia-news/2026/may/26/power-bills-drop-fall-australia-energy-default-market-offer

5. Ember: https://ember-energy.org/data/european-electricity-prices-and-costs/

6. Ofgem: https://www.ofgem.gov.uk/consultation/review-typical-domestic-consumption-values

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net