Martin Lewis has warned that domestic energy bills could soar by 15% as wholesale gas costs reach their highest level since 2022. The warning, posted on X (formerly Twitter), signals immediate and future financial pressure for households across the UK, particularly those served by the five largest suppliers: British Gas, EDF, EON, Ovo and Octopus.
The founder of MoneySavingExpert.com, who also appears on BBC and ITV programmes, said the situation for UK energy bills "really isn't looking good." He explained that the current trajectory feeds into the January price cap, which is "currently on target to rise 10% to 15% over October's cap."
Middle East tensions drive wholesale prices higher
Richard Hunter, head of markets at Interactive Investor, attributed the rising costs to the deteriorating situation in the Middle East, which is fuelling fears over energy supplies just as demand increases heading into winter. "The outlook in the Middle East has recently worsened once more, with any signs of detente looking elusive," he said.
Hunter added that consumers could be affected by the lack of supply as colder seasons approach. His comments come as Ofgem's energy price cap is set to rise by 4% in October, with analysts predicting an even steeper increase in the new year.
January price cap could rise by another 13%
Andrew Goodwin, chief UK economist for Oxford Economics, said the increase in wholesale gas prices has more than offset the saving from the Government removing VAT from electricity bills between October and March. "We think the price cap could rise by another 13% in January – wholesale prices are currently well above the level of the previous observation window, and our commodities team expect them to remain high in the near term," he explained.
Simon Francis, coordinator of the End Fuel Poverty Coalition, highlighted that the wholesale cost of gas has hit a high not seen since December 2022, while heating oil prices have also surged. "The Ofgem price cap for January is being calculated on prices like these, which means it could be brutal for households already struggling," he said.
Impact on households and call for government support
Francis noted that those using heating oil or on some heat networks, who are not covered by the price cap, may see increases even sooner. He called on the Government to provide targeted support for struggling households and those in energy debt, and to "back the long-term energy efficiency measures that can protect the public from future market volatility."
The warning will particularly concern households in Birmingham and across the UK served by British Gas, EDF, EON, Ovo and Octopus, the country's biggest energy suppliers. With the October price cap rise already confirmed and January's increase potentially reaching 13-15%, households face a challenging winter ahead.
