Energy bills set to jump £322 per year in July as soaring gas prices hit Brits (Image: Getty)
Household energy bills could jump by £332 a year in July as recent sharp increases in wholesale prices are set to feed through into Ofgem’s price cap, according to the latest forecasts. Analysts Cornwall Insight said forecasts for the watchdog’s price cap from July to September had surged to £1,973 a year for a typical dual fuel household, marking an increase of £332 or 20% on April’s cap.
Cornwall said household energy bills over the summer look set to be higher than anticipated before the escalation of conflict in the Middle East, which has sent wholesale gas and oil prices soaring. Even if wholesale prices quickly returned to pre-conflict levels, some of the recent volatility will be baked into the next price cap, which covers July to September, it said.
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Sharp increases in wholesale prices are set to feed through into Ofgem’s price cap in the summer (Image: Getty)
However, the figure is likely to change, and the size of the increase to the next price cap will depend on how long gas prices remain elevated and how long the disruption persists.
Emily Seymour, Which? energy editor, said: “It’s important to remember this is a prediction, and the final price cap won’t be confirmed until the end of May. If you’re already on a fixed tariff, your rates won’t rise.”
For households not on a fixed deal, it’s worth comparing what’s available.
Ms Seymour said: “But don’t panic and rush into an expensive deal. Many fixed tariffs for new customers have already been withdrawn as providers respond to market volatility. Fixing can protect against potential price rises, but only if the deal is competitive.
“Check exit fees and ensure any rate cuts from April 1 are factored in so you’re comparing like-for-like.”
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Ms Seymour added: “Consumers should also be aware that energy companies are obliged to help if you’re struggling to pay and will not disconnect you for missing a payment.
“Contact your supplier to set up an affordable payment plan, request a review or break in payments, and access any available hardship funds.”
Markets were sent into turmoil after the US and Israel launched wide-ranging strikes on Iran on February 28.
Iran responded with its own attacks on Israel and US-allied states in the Gulf, forcing the closure of the Strait of Hormuz, which accounts for around 20% of global oil and gas supply.
This has prompted some of the largest oil and gas producers to suspend production, driving oil prices as high as $120 a barrel on Monday. Prices have since dipped but still remain elevated at around $104 a barrel on Friday.
Tasmin Powell, consumer finance expert at Creditspring, said: “For many households, a potential £300 or more increase in energy bills will be a worrying development, particularly at a time when budgets are already stretched.
“It remains important for consumers not to panic. Energy prices are heavily influenced by global markets, and forecasts can change, so consumers should avoid making hasty financial decisions based on headlines alone.
“As the weather improves, making the most of natural light, switching appliances off at the plug rather than leaving them on standby, and reviewing heating and hot water settings can all help manage energy use.
“It’s also encouraging to see the Government stepping in, with the Prime Minister recently announcing a £53 million support package targeted at the most vulnerable households.”
She added: “Staying informed, taking practical steps, and waiting for confirmed updates is the most sensible approach consumers can take.”