Iran war and UK energy prices – current impact and what it means for energy bills

Recent events in the Middle East are creating big challenges for the world economy – especially in the energy markets. We know lots of people are worried about the impact on energy bills in the months and years ahead. We're committed to keeping you up to date as things change, and we'll continue sharing the latest information and guidance, so you always know where you stand.

Here are our best answers to some of the questions you might be asking right now.

UK energy prices and the current situation

Are energy prices going up because of global events? Will the Middle East crisis increase UK energy bills?

Yes. Events in the Middle East are causing prices to rise in the wholesale energy market – which is where energy companies buy their gas and electricity. The wholesale cost of energy is about 50% of the total cost to supply a customer, and this has already affected our latest fixed prices.

However, in the short term there's some better news - following changes by the UK Government in the 2025 Budget and Ofgem's recent  price cap announcement, energy prices are going down from 1^st April.

Will my energy bill rise in the next few months?

The new price cap from 1^st April 2026 was set before the current crisis started, so a typical customer will see a reduction in their bills. However, because of the crisis, we predict the next price cap from 1^st July will increase by about 9%. And we expect more increases in the following two price caps on 1^st October and 1^st January 2027. When it comes to fixed-term tariffs, we think these are likely to be more expensive to reflect increases in wholesale prices.

What are the latest energy price cap predictions?

Our experts forecast more volatility coming in 2026/27, which may push the price cap up over the next three quarters. We want to keep you informed and supported, so head to our price cap predictions for a clear explanation and weekly updates on what's happening.

How do global wholesale prices affect my bill?

Wholesale prices make up roughly half your bill, so spikes in the market make it more expensive for us to supply your energy. Ofgem looks at changes in wholesale prices when setting the price cap every three months.

Energy supply and long term stability

Is the UK at risk of running out of gas?

No, this isn't something to worry about. Some people have expressed concern about the UK's limited storage, but the country has a wide range of supply sources, including North Sea production and imports of liquefied natural gas.

We secure reliable gas from a range of sources and increase storage so there's plenty available when it's needed. Our Rough storage facility - the UK's largest - now provides around half of the country's gas storage. We've also secured long-term international supply agreements to help guarantee gas for years to come.

Are renewables or nuclear the answer to long‑term price stability?

Renewables and nuclear both play an important role in the UK's energy mix. They also help to reduce our reliance on volatile global energy markets, so long-term investment is an important way of supporting a stable industry that works for everyone.

We're investing for the long term to help keep the UK's energy supply secure and stable. This includes supporting existing nuclear power stations and investing in new projects like Sizewell C Nuclear Power Station, which will provide reliable low-carbon electricity for decades. At the same time, we're increasing gas storage, securing long-term energy supplies, and investing in technologies to help protect customers from global price shocks in the future.

Understanding your tariff options

Should I switch to a fixed tariff now?

When available, fixing can save you money if energy prices rise. On the other hand, a tracker tariff can turn out to be cheaper if prices fall. There's often no right answer – it all depends on how much certainty you want. Having said all that, prices are expected to rise later this year, so fixing now might be the cheaper option.

Why aren't you offering fixed tariffs currently?

The situation in the Middle East is causing big changes in energy prices – from hour to hour, and even from minute to minute. This makes it extremely difficult to offer our customers fair prices that also reflect what we pay for energy. We’ll certainly be offering fixed tariffs again in the future, but not until the volatility in the market has settled down. 

Should I stay on a tracker tariff during volatility?

It really depends on how much price certainty you'd like. A tracker tariff will rise with market prices but also fall if the wholesale energy prices drop quickly. With a fixed tariff, your prices stay the same for the length of your energy plan.

How do tracker tariffs work?

Our fixed-term Tracker tariff is variable, meaning prices can go up or down every three months with Ofgem’s price cap. You get a guaranteed discount on standing charges – so you’ll always pay less than the price cap.

What's the best fixed tariff right now?

Because energy prices are changing so often, energy tariffs are also being updated on a regular basis. If you’re a British Gas customer, you’ll find our latest offers in your online account or use our app. Here you'll be able to see all the fixed tariffs that are available, and what they'd cost each month based on how much energy you use.

And if you're not a customer yet, we'd love you to join us. Getting a quote is easy and only takes a few minutes.

Will I lose money if I switch from tracker to fixed?

With energy prices changing so much, tracker tariffs are currently cheaper than fixed deals. If you’re with British Gas for your energy, you’ll find our most up-to-date offers in your online account or use our app. Here you'll be able to see all the tariffs that are available to you, and what they'd cost.

And remember, even if you choose a tracker tariff now, you can always switch to a fixed tariff later - for free.

Not a customer yet? We'd love you to join us. Getting a quote is easy and only takes a few minutes.

Is it worth paying an exit fee to switch tariff?

Paying an exit fee to switch energy tariffs can be worth it if the savings on a new deal outweigh the fee. If the new tariff cuts your bills significantly, switching usually makes sense. If the savings are small, it's often better to wait until your current deal ends.

But the good news is, if you're with British Gas for your energy, it's easy – you can switch to a cheaper fixed tariff anytime, and there's no fee.

Reducing bills and saving energy

How can I reduce my energy bills immediately?

There are all sorts of ways to save energy around the home, from turning down your thermostat to choosing shorter cycles on appliances like washing machines and dishwashers. For electricity, you can make savings if you're on a dual-rate tariff by shifting as much usage as you can to your cheaper hours. And, if you’re with British Gas for your energy,  definitely sign up for PeakSave, so you can make the most of half-price electricity on Sundays, from 11am to 4pm!

What's the cheapest time of day to use appliances?

If you're on a variable tariff with cheaper off-peak electricity, check which hours qualify for the lower rate on your tariff. That will be the best time to use energy-hungry appliances like ovens and tumble dryers. If you're on a single-rate tariff, you'll pay the same for boiling a kettle at 4am as 4pm, so if you’re a British Gas customer, you'll only be able to take advantage of lower-cost power on PeakSave Sundays between 11am and 4pm. We also have various time-of-use offers available that can help you save money on heat pumps and EV charging.

What are the top ways to save energy at home?

The biggest ways to save energy around the home are installing insulation, getting smart controls for your heating, buying energy-efficient appliances, and shifting more energy usage to times when you can get cheaper electricity. Read more energy-saving tips.

Which energy provider is cheapest?

Every energy supplier prices things a little differently, but we know that value isn't just about the lowest price. When you look at the whole package - like the quality of support and the peace of mind you get - it becomes much easier to find the right fit for your home.

With things feeling a bit unpredictable right now, it's good to know you're in safe hands with us - we power over 8 million homes and businesses in Britain. And we've been around for 200 years, so we aren't going anywhere.

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