Iran war impact to hit household energy bills for the first time
Summary
Household energy bills in the UK will rise sharply in July due to higher wholesale prices caused by the war in Iran. The energy regulator Ofgem plans to increase the price cap, leading to typical households paying about £209 more per year for gas and electricity.Key Facts
- Ofgem will announce a new energy price cap for July to September that is expected to rise by 13%.
- A typical household’s annual energy bill could increase to around £1,850, up by approximately £209.
- The rise is linked to a 25% increase in global gas prices caused by the conflict near the Strait of Hormuz.
- Wholesale energy costs make up about 40% of household gas and electricity bills.
- The price cap covers about 19 million homes on variable tariffs in England, Scotland, and Wales; fixed tariff customers are not affected until their contracts end.
- Many households have already reduced energy use through conservation to save money.
- The government is working on targeted support plans to help those most affected before winter.
- Energy bills have already increased by about £600 annually since the price rise started in 2022-23.
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