Martin Lewis has warned people to fix now (Image: ITVX)
Money expert Martin Lewis is warning people to fix their energy bills now as the conflict in the Middle East is set to see prices rocket.
Martin Lewis took to Twitter on Tuesday morning to flag the latest in the rapidly developing situation between Iran, the US and the rest of the Middle East and the expected knock-on effect on gas and electricity prices.
Martin told his followers ‘don’t dawdle’ if you’re planning to fix, because firms are putting energy prices up today.
Right now, you can still get a fix for 14% less than the price cap, but it’s not going to last, Martin warned.
He said: “Planning to imminently FIX your energy bill? Don’t dawdle. Firms are repricing upwards today & tomorrow on back of Iran. Cheapest still 14% under Price Cap but I doubt for long (it may rebound, but in v short term they’re up).”
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Martin then pointed to a spike in gas prices which is set to push bills up, especially on new fixed rate tariffs. He added: “The spike in the gas price (a prime driver of UK electricity prices) due to the Iran conflict is substantial in the context of the last six months, but as the second image shows it isn’t a Ukraine war type spike.
“In the short term its primary consumer energy bill impact will be to push up the price of new fixed rate energy tariffs. How much it impacts the (July onward) Price Cap is a function of how long it spikes for. If it’s short it will be minimal, if it’s longer then its likely to drive prices up from July.
“The other immediate domestic energy concern is the cost of domestic heating oil which has risen sharply.”
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In another post, Martin added: ” The wholesale gas rate is spiking due to the Iran conflict, and it is a prime driver or UK elec prices. If that’s sustained (big if), it will likely push the Price Cap rate up from July – Some of the cheap fixes from before the weekend haven’t (yet) been pulled, so you can still lock in a rate at around 14% less than the current Price Cap, both saving you money and giving peace of mind that the rate can’t rise.
“You can do a whole-of-market comparison via http://cheapenergyclub.com – However, many firms are reassessing their fix prices today and may reprice their deals upward. There’s a risk many of the current cheapest fixes will be gone by this time tomorrow – Plus, fix now, and unprecedentedly the rate you lock in at will be reduced on 1 April.
“This is because govt is changing the underlying way energy bills work and moving some policy costs to general taxation. That reduces the elec & gas unit rates even for those already on fixes. So even if you fix now the amount you pay will drop by 7% to 9% on typical usage on 1 April – Fixes are available for most payment methods except prepay. Those on smart prepay can look at the EDF Simply Tracker tariff, which is effectively a price cap tariff with £100 lower Standing Charges (and £70 extra cashback on top via the link above)”
The Ofgem energy price cap is still going to reduce by £117 for an average dual fuel household from April 1, and the recent conflict in Iran won’t change that. But as Martin points out, fixed deals which currently undercut the price cap are set to go up in price from now.