Energy bills to jump 13% from July as Ofgem blames Middle East gas prices

Millions of households face a fresh rise in energy bills this summer after Ofgem confirmed its price cap will increase by 13% from 1 July, adding roughly £18 a month to a typical dual-fuel direct debit bill.

The regulator pinned the increase squarely on higher wholesale gas prices, which it said had been pushed up by the ongoing conflict in the Middle East. Wholesale costs have risen by around 28% over the past three months, feeding directly through to what consumers pay.

The rise covers the three months from 1 July to 30 September and reverses some of the relief households enjoyed earlier in the year, just as families head into the warmer months when usage typically falls.

The announcement is a stark reminder of how exposed Britain remains to events thousands of miles away. Despite years of promises to build greater energy independence, the country still relies heavily on imported gas, leaving bills at the mercy of conflicts and supply shocks in distant markets.

Gas takes the brunt

The pain is far from evenly distributed across the two fuels. Ofgem said electricity prices would rise by around 5%, while gas prices would climb by roughly 24%, reflecting how exposed Britain's gas supply remains to global market swings.

The relatively modest electricity increase is partly down to the growing share of renewable generation on the grid, which reduces reliance on expensive gas-fired power stations during periods of volatility.

Under the new cap, a typical household paying by direct debit will see unit rates of 26.11p per kWh for electricity and 7.33p per kWh for gas, alongside daily standing charges of 57.19p and 29.04p respectively.

Standing charges, the fixed daily fees customers pay regardless of how much energy they use, remain a particular source of frustration for low-usage households, who argue they shoulder a disproportionate share of the cost. Ofgem has faced repeated calls to reform how those charges are levied.

How much more households will pay

The cap limits the price suppliers can charge per unit of energy and per day, rather than capping a household's total bill. The amount each home actually pays depends on how much energy it uses, where it lives and the type of meter installed.

• Overall increase: 13% from 1 July to 30 September
• Electricity prices up around 5%
• Gas prices up around 24%
• Roughly £18 a month more for a typical dual-fuel direct debit household
• Around 22 million accounts on fixed tariffs are unaffected

Ofgem stressed that prices remain well below the peak of the 2022 energy crisis, when government intervention was needed to cap bills, and noted that around 40% of accounts are on fixed deals shielded from the latest move.

“We know any increase in bills is unwelcome, and this rise is being driven by international gas prices that are beyond our control. We urge anyone who is struggling to contact their supplier for support.”

Calls for reform

Consumer groups renewed their warnings that the cap system leaves households dangerously exposed to events overseas, arguing that Britain's reliance on imported gas makes bills hostage to geopolitics far from its shores.

Charities urged people who are worried about paying to speak to their supplier early, check eligibility for support schemes, and consider switching to a competitive fixed tariff to lock in certainty over the colder months ahead.

For many households, the timing offers a small mercy: the increase takes effect during the summer, when heating use falls and bills are naturally lower. The concern is what happens when usage climbs again in autumn and the next cap is set.

Background

The price cap was introduced in 2019 to protect customers on standard variable tariffs from being overcharged. Since the 2022 energy crisis it has become a quarterly barometer of the cost-of-living squeeze, with each announcement scrutinised for its impact on household budgets.

Ofgem reviews the cap every three months, meaning the figure that takes effect in July will be revisited again ahead of the crucial autumn and winter quarter. The mechanism is designed to track wholesale costs with a lag, which means today's market moves shape the bills households pay several months later.

What happens next

Attention will quickly turn to the October cap, which covers the start of the heating season and tends to be the most consequential of the year. With Middle East tensions still simmering, analysts warn that further volatility in wholesale gas prices could keep bills elevated well into the winter.

The latest rise also sharpens the debate over longer-term solutions, from accelerating the rollout of renewables and home insulation to reforming the cap itself. For now, though, households face the familiar task of bracing for higher bills with limited means to avoid them.