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UK energy bills to rise as Iran war cuts supply

British regulator lifts country's cap on household energy prices by 13 percent

By Earle Gale in London | chinadaily.com.cn | Updated: 2026-05-28 03:25
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FILE PHOTO: Flames come out of a domestic gas ring of an oven in Durham, Britain, Sept 23, 2021. [Photo/Agencies]

British people will soon be paying an average of 221 pounds ($297) more each year for the energy they consume, largely because of restricted flow due to the Iran war.

The change follows a decision on Wednesday by the United Kingdom's energy regulator — the Office of Gas and Electricity Markets, or Ofgem — to increase the country's cap on household energy prices by 13 percent from July 1.

The regulator said it needed to increase the cap because of fast-rising wholesale energy costs attributed to the conflict that was started by the United States and Israel on Feb 28, and the resulting closure of the Strait of Hormuz.

Ofgem said the change means the average UK household will pay 1,862 pounds a year for gas and electricity, up from 1,641 pounds.

Ofgem's chief executive, Tim Jarvis, told the BBC the organization understands "many (consumers) will be concerned about rising prices" but that there was no choice, other than to increase the cap.

"While energy use typically falls over the summer months, there are still practical steps households can take to manage costs, including exploring fixed tariffs or changing their payment method," he said, noting households that lock into long-term rates can avoid fluctuating prices.

Energy suppliers, meanwhile, have said the cost of gas and electricity will likely increase by a significant amount in the winter, if the conflict is not over by then, because around one-fifth of the world's oil and gas is normally transported through the Strait of Hormuz.

Since the conflict began, the global price of gas has risen by around 25 percent.

Reuters quoted Adam Scorer, chief executive of consumer group National Energy Action, as saying the UK government should quickly say how it will help people pay their energy bills.

"Now is the time for the government to set out targeted interventions to help those on the lowest incomes afford their energy and to clear their debt," he said.

The UK government has said it is developing plans and Ed Miliband, the country's secretary of state for energy security and net zero, said: "The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that's why easing that burden is our number one priority."

The government is also likely to look to reduce reliance on gas and oil and increase the use of renewable energy, from wind and solar power plants.

Ofgem adjusts its price cap four times a year and is scheduled to make another change in September, which experts say could feature an even larger hike.

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