Households across Great Britain will face their steepest summer energy bill increase in four years after the government’s energy price cap climbed by 13%.
The average gas and electricity bill will rise to the equivalent of £1,862 a year from July until the end of September, up from £1,641 a year during the April to June period.
The increase has been driven in large part by soaring global energy market prices caused by the war on Iran, which has created the biggest energy supply shock on record by choking oil and gas exports from the Gulf.
Energy secretary Ed Miliband said it was essential to de-escalate the conflict in the Middle East in order to bring oil and gas prices down for consumers.
“The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country,” Miliband said, adding that the answer was to “go further and faster” with the government’s drive for clean homegrown power.
Under the new cap, households paying by direct debit will see electricity charges rise from 24.67p per kilowatt hour to 26.11p, while gas charges will increase from 5.74p to 7.33p per kilowatt hour.
The £1,862 figure equates to a rise of £18 a month, or £221 a year, for the average household using both gas and electricity.
It is the highest level for the cap since the first quarter of 2024, when it stood at £1,924, though it remains well below the peak of £4,279 reached in early 2023.
Ofgem interim chief executive Tim Jarvis told BBC Radio 4’s Today programme that the rise was “almost entirely driven” by the increase in global gas prices resulting from the Middle East conflict.
In Europe, gas prices have more than doubled from pre-crisis levels and are approximately three times higher than before Russian gas exports halted following its invasion of Ukraine.
Jarvis said the next quarterly change to the cap, due in October, would largely depend on how soon a peace deal was reached in the Middle East and whether the strait of Hormuz reopened.
“It is unfortunately now looking like a more long-term disruption to markets than we might originally have hoped,” Jarvis said, warning that elevated prices were likely through the winter.
While the summer rise is expected to be painful for consumers, the greater concern remains the autumn and winter period, when households typically consume significantly more energy.
Unpaid energy bills have already reached a record high of £4.5bn earlier this year, according to the latest official data, with those debts partly recovered through an annual £52 charge included in the price cap.
Jarvis encouraged households to consider fixing their energy bills now as a way to prepare for potential further increases in the coming months, while acknowledging the risk of missing savings if prices fell.