Martin Lewis has issued an update regarding an imminent change to energy bill tariffs. He spoke about some market shifts that are expected to affect both gas and electricity costs.
Taking to social media on June 15, Mr Lewis had some comments following the signing of a peace deal between the US and Iran. He shared a graph from Trading Economics illustrating fluctuations in the price of 'Natural Gas UK', highlighting a recent decline in prices.
Mr Lewis said: "The US and Iran signing a framework deal has pushed natural gas prices down. These wholesale prices are a key driver of UK gas and electricity bills."
"As the six-month graph shows, though, prices still have a long way to fall before returning to pre-conflict levels." He noted that the fall in prices could influence the deals available to bill payers.
'Significantly higher'
Mr Lewis said: "The good news is that this could lead to slightly cheaper fixed tariffs being launched in the coming days. However, without substantial further drops, the October price cap still looks likely to be significantly higher than it is today."
One commenter pushed back on the warning, arguing that the graph fails to reflect the actual prices paid by consumers. They said: "This affects the paper prices of gas and oil. Not even close to actual prices that actually get paid."
To which Mr Lewis replied: "Yes and no. It is the main 'change' dynamic. The overall price is dictated primarily by policy costs, but the movement in prices is dictated by wholesale costs."
Cheaper deals
He responded to another message saying that fixed-rate deals are "likely to get cheaper if this holds". When calculating the October price cap, Ofgem uses an assessment period running from May 29 to August 18, meaning some of the elevated prices seen in recent weeks will be taken into account by the regulator when determining where the October price cap will be set.
The price cap is rising 13 per cent from July 1. This will result in an increase of approximately £18 monthly for the typical household paying for dual fuel via direct debit.
Analysts had previously forecast that the price cap would rise again by 2 per cent or 3 per cent in October, and remain at that level in January. Discussing these forecasts on his BBC podcast recently, Mr Lewis said: "If you are on the price cap, the default tariff, you are going to likely pay substantially more than now until at least next March."
