UK Energy Bills Set to Soar as Gas Prices Hit Four-Year High
The UK is bracing for higher energy bills as gas prices reach a near four-year high and oil costs surge above $100 per barrel. Traders are reacting to attacks on Iranian oil tankers and concerns about supply disruptions in the Middle East.
US officials reported that multiple tankers were struck in retaliation to attempted missile attacks on a Navy warship, causing Brent crude oil prices to jump by nearly 3% to around $100.50 per barrel. This marks the highest price since late July.
UK natural gas prices also rose by about 3% to around 195p per therm, hitting their highest level since December 2022. Rising oil costs and supply disruptions are influencing fuel prices, which have increased further in recent days.
The RAC reported that the average price of petrol has risen by 5p a litre to reach 167.17p, while diesel has also increased by the same amount to 188.63p. Experts warn that the latest surge in wholesale prices could feed through into consumer energy bills in the winter.
Ofgem's energy price cap will rise by 4% in October, and analysts predict a bigger hike of 13% in January. Andrew Goodwin from Oxford Economics noted that wholesale gas prices have more than offset savings from removing VAT from electricity bills between October and March.