British Gas, Octopus, OVO, and EDF customers are being warned of a £209 increase in annual energy bills as the household energy price cap is set to rise from July. This forecast by Cornwall Insight comes amid global energy market turmoil triggered by the ongoing conflict in the Middle East.
Price Cap Increase Details
Cornwall Insight predicts the average annual dual-fuel bill will jump from £1,641 to approximately £1,850, representing a 13% increase over three months. The rise is largely attributed to escalating wholesale energy prices resulting from the Iran war. Experts caution that prices may remain elevated into autumn and winter.
Global Energy Market Chaos
The US and Israel conducted joint strikes on key Iranian sites on February 28, prompting Iran to retaliate by striking regional targets and closing the critical Strait of Hormuz trade route. Approximately 20% of global oil passes through this strait, and its closure has caused fuel prices to surge worldwide. This instability has directly impacted UK household energy bills.
Craig Lowrey, principal consultant at Cornwall Insight, stated: "Over the past few months, we’ve watched our forecasts shift from showing virtually no quarter-on-quarter increase to a 13% rise in current bills - with this change due to the impacts of the Middle East conflict."
Concerns for Autumn and Winter
Although energy usage is typically lower during warmer months, experts are worried about the situation later in the year when temperatures drop and demand spikes. Current forecasts suggest the October price cap could remain close to July's elevated levels, meaning households may not experience the usual autumn relief.
Lowrey added: "While households will understandably be frustrated by a rise during the summer, the bigger concern is October, when demand picks up again."
Even if the conflict ended immediately, damaged infrastructure and disrupted global supply chains mean energy prices are unlikely to return to pre-war levels quickly. The End Fuel Poverty Coalition warns that millions of families already struggling with energy debt could face an extremely difficult winter if prices remain high.
Government Urged to Act
The UK Government is being urged to set out emergency support plans before winter arrives. Ofgem will officially announce the next energy price cap on May 27.
Tips to Reduce Energy Bills
Experts suggest simple changes households can make in the warmer months to improve home energy efficiency before heating systems are needed again:
- Bleeding radiators
- Checking for draughts
- Servicing boilers
- Improving insulation
- Washing clothes at 30°C
- Avoiding unnecessary tumble dryer use
- Batch cooking meals
- Using dishwasher eco settings
