"Fixed tariffs are based on the fact the day you want to take out a fixed tariff, the energy company goes to the wholesale market and buys a year's worth of energy for you, and because the wholesale market are now reflecting at least some of the cost increases from the effects of the war in the Middle East, new fixed tariffs are then higher."
"Some companies won't offer them at all because they are not confident in being able to lock in those prices a year in advance. Where you are seeing fixed tariffs they are now typically a hundred pounds a year more expensive than a year before the conflict."
"In energy terms, Iran has effectively closed the Strait of Hormuz, which transports 20% of the world's oil and gas supplies, and Qatar has said it cannot honour its contracts to deliver its gas, so the energy markets are in turmoil."
Energy markets face significant disruption from escalating Iran-US-Israeli conflicts, with wholesale energy costs rising substantially. Octopus Energy and other major suppliers have responded by increasing fixed-price tariffs and introducing exit fees, with over half of available fixed-price deals disappearing within a week. Fixed-price plans now cost approximately £100 annually more than a year prior. Most UK households remain protected by the energy price cap on variable deals, though bills are expected to decrease in April before potentially rising 10% by July. The conflict's impact on critical infrastructure, including the Strait of Hormuz transporting 20% of global oil and gas supplies, and Qatar's inability to honor gas contracts, continues to destabilize energy markets.
#energy-market-crisis #fixed-price-tariffs #middle-east-conflict-impact #uk-energy-prices #wholesale-market-volatility
Read at London Business News | Londonlovesbusiness.com
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