Conflict in the Middle East: Martin Lewis' 'get off the Energy Price Cap' mini briefing

MSE_Clare

The wholesale gas price – what energy firms pay for gas – is spiking due to the conflict in the Middle East. This rate is a prime driver of UK electric prices, which means that if the spike's sustained (big if), it will likely push the Energy Price Cap rate up from July.

Conflict in the Middle East: Martin Lewis' 'get off the Energy Price Cap' mini-briefing

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MSE_James

Just a gentle reminder from the Forum Team at this point that comments in this thread should be focussed on the energy bills side of things, rather than the politics and geopolitics of the situation. Thank you 🙂

Altior

Can you show how the energy price cap for electricity has been correlated with the wholesale gas price, say, over the last 10 years?

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/81907767#Comment_81907767

hardly price cap started 2019 iirc

Altior

https://forums.moneysavingexpert.com/discussion/comment/81907861#Comment_81907861

From when it started then, would do!

Seems to me that this is element of the post This rate is a prime driver of UK electric prices is stated as fact.

I take a very very partial interest in such matters, but I am interested in investing (including commodities) and in my recollection, the wholesale price of gas has been very low in recent times. The price cap for electricity has not. Cap info:

January 2019 16.52p

January 2026 27.69p

So looks like the Electricity per kWh at the start of 2026 was not far from double that of 2019.

Essentially I'd like to see the evidence, rather than it being stated as fact. And draw my own conclusions.

Altior

I suppose even more interesting…

Jan 2019 Electricity daily charge 22.77p

Jan 2026 Electricity daily charge 57.21p

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/81907910#Comment_81907910

That's government/ofgem interference

Edit nothing to do with suppliers, and of course suppliers have nothing to do with commodities per se , that's producers .

Edit again also National Grid is not a producer, but of course they do get interfered with by the Government.

Altior

https://forums.moneysavingexpert.com/discussion/comment/81907931#Comment_81907931

So what's the main driver of the energy price cap for electricity?

It's an open question, and certainly the answer isn't as dogmatic as the opening statement, in my view.

Energy policy is a huge factor. Which central policy does control.

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/81907944#Comment_81907944

I sort of agree but also disagree, my take is "it's the market stupid". I remember oil futures going negative, there wasn't hundreds of tankers delivering oil from the gulf to anyone and paying them to take them of their hands. I could go on to talking about CFDs etc and paying for not providing it .

The question could be do you agree with "green" policies or the "orange" ones?

Altior

https://forums.moneysavingexpert.com/discussion/comment/81907967#Comment_81907967

Yes, avoiding the politics!

I feel it could be argued that the market's raw commodity price is the driver of price FLUCTUATION, but generally not the overall 'retail' price.

No doubt the increase in the spot price for oil will impact the pump price of petrol. But the main driver of the pump price of petrol itself is central policy.

QrizB

So what's the main driver of the energy price cap for electricity?

UK wholesale electricity prices kinda-ish track the gas price. If I had time I'd post screenshots to show the correlation.

UK retail prices are "wholesale plus other stuff" and the other stuff has risen in recent years which is why retail prices haven't fallen as much as wholesale ones have.

If you read some of @Scot_39 's regular posts you'll see how the government has loaded the retail electricity prices with things that might be better paid from general taxation.