UK firms pull fixed energy deals as Iran war pushes up prices

Energy suppliers in the UK are pulling a raft of fixed-price tariffs from the market following a spike in oil and gas prices caused by the US-Israel war with Iran.

The number of fixed deals available has more than halved since the weekend and those remaining have jumped in price, according to data from price comparison website Uswitch.

Energy UK, which represents suppliers, said uncertainty in the wholesale fuel market has made it difficult for firms to offer a fixed price for a year or longer.

Energy costs for households have soared in recent years, with many people struggling to pay bills alongside price rises for food and services as well.

Wholesale energy prices have fallen since a spike in 2023 but remain much higher than before Russia's full-scale invasion of Ukraine.

Prices surged again this week following the outbreak of the most recent Middle Eastern conflict, as production and transport of oil and gas across the region has slowed or stopped entirely in many cases.

Data from Uswitch, which is for the whole UK energy market rather than just its website, suggests this is already feeding through.

It said the number of fixed tariffs has slumped from 38 on Saturday to 15 on Thursday, while the price range for those tariffs has climbed from a range of £1,509-£1,898 to £1,640-£2,194 over the same period.

Fixed tariffs are regularly removed from the market alongside the introduction of new offers as suppliers compete with each other, but data from MoneySuperMarket has found that the number of removals has leapt.

It said 65 tariffs have been pulled so far this week, either for repricing or withdrawn completely. That compares with just 14 removals for last week, 19 for the week commencing 16 February, and 11 for the week before that.

Of the so-called 'Big Six' firms who supply most of the UK's energy, only Octopus and EDF have confirmed they are still offering fixed deals.

The BBC understands E.On is also still offering a fixed tariff while British Gas, Ovo, and Scottish Energy have all pulled theirs.

The energy price cap means those on a variable tariff won't see a price rise in their energy bills until at least July, and those on a fixed rate won't see a rise until their term ends.

However, Energy UK's deputy policy director Ned Hammond added that "should current gas prices remain as high as they are for several more weeks, this could have a material impact on future price caps".

Octopus said it has "temporarily" introduced exit fees because of the wholesale price spike, meaning new customers leaving its fixed tariff before the end of their contract will have to pay to do so.

"We can no longer absorb the full cost of the energy we buy in advance for new fixed‑tariff customers if they choose to leave us during the period of the fix... Other suppliers have exit fees even in normal circumstances, but it's rare for Octopus," a spokesperson said.

A spokesperson for British Gas said: "As a result of uncertainty in the global energy market, we are focusing on more flexible options for customers like our new Cap Tracker tariff that will always be priced below the cap."

EDF said: "While global events can influence wholesale energy markets, we are monitoring conditions closely and remain focused on offering competitive and fair options for customers."