Our founder Greg breaks all of it down in lower than 5 minutes:
Why are world gasoline costs going up?
Vitality costs are spiking proper now as a result of developments within the Center East have sharply decreased world provide. The primary driver is strikes launched by Israel and the US on Iran, which has successfully turned the Strait of Hormuz right into a no-go zone. Roughly 20% of the world’s oil and gasoline normally passes by this waterway, so thousands and thousands of barrels have been barred from getting into the worldwide provide chain.
The disaster intensified on March 2 when QatarEnergy, one of many world’s largest exporters, halted liquid pure gasoline (LNG) manufacturing at its two essential amenities. On March 4, Qatar formally declared drive majeure — a authorized “act of God” clause that enables them to cancel gasoline deliveries with out penalty attributable to uncontrollable circumstances like warfare.
What’s going to occur with my vitality tariff?
For those who’re on our variable tariff, Versatile Octopus, the earliest you’d see the current market spikes impression your payments is July.
Your costs are protected by the vitality worth cap, which has already been set for April-June (a ~£117 discount for the typical dwelling vs January costs because of the federal government’s levy minimize). If these wholesale market will increase stick round, you’d first see their impression on the worth cap for July-September.
For those who’re on a hard and fast tariff, your charges are locked in til your contract ends. When it’s time to resume, we’ll present you our greatest costs accessible on the time, which change often primarily based in the marketplace.
Will tariff costs go up long term?
Our newest mounted costs have already gone up about £200 in the previous couple of days (as of 8pm 4/3/26). It’s unimaginable to foretell the long run: they might go up extra, or they might come down – it largely will depend on what occurs within the Center East.
One bit of fine information: from April 1st, the federal government are chopping some levies out of your vitality payments – round £130 price saving for a typical dwelling – which helps to counteract the impression of upper wholesale costs.
So, ought to I repair my costs?
None of us have a crystal ball that reveals how lengthy this battle will final, so we are able to’t know for certain what’s greatest.
For those who’re on a hard and fast tariff with a number of months left to go, then it may be greatest to remain on that, as in any other case you’ll be paying extra within the quick time period. Verify your tariff (scroll down til you see your tariff and meter data).
For those who’re on Versatile Octopus, or close to the tip of your mounted tariff and also you’re apprehensive about lasting battle within the Center East, fixing for 12 months means you’ll be paying across the similar because the vitality worth cap all through 2025 – so it will not be a foul deal to guard towards future will increase.
Keep in mind that our newest tariffs do have exit charges, in order that’s one thing to contemplate fastidiously when you may want to maneuver tariffs throughout the subsequent 12 months. Why do a few of our tariffs have exit charges?
You’ll be capable of repair on-line when you’re on Versatile Octopus otherwise you’re inside 49 days of the tip of your repair. For those who can’t see the choice to repair on-line, you’ll be able to chat to our crew as a substitute – e-mail hi [email protected].
I’m on Octopus Tracker or Agile Octopus – ought to I transfer to a typical tariff proper now?
That is genuinely your resolution and we might by no means push you both manner. What the information reveals is that with these dynamic, wholesale-based tariffs, you might pay greater than commonplace tariff prospects within the quick time period, however typically these spikes do not erase long-term positive aspects.
Historic Tracker gasoline charges vs the Versatile Octopus worth cap, 2021-2026
We do not understand how lengthy battle might final, but when the state of affairs stabilises quickly and wholesale costs fall again rapidly, leaving your dynamic tariff now means being locked out for as much as 9 months – so would imply lacking out on these decrease costs for some time.
Over the previous 5 years, Tracker and Agile prospects who stayed the course have come out with financial savings. Learn extra right here.
If you would like safety and stability throughout this turbulence, you are free to repair now or transfer to Versatile Octopus, our worth cap protected tariff – learn extra about these choices above.
No matter you determine, we’re right here to assist.
What wouldn’t it really take for the UK to be ‘vitality safe’?
Photo voltaic panels powering a lighthouse in Norway
Why does the UK hold getting hit so exhausting by world vitality crises?
As a result of we’re closely depending on gasoline, which is a world commodity. When provide is disrupted anyplace on this planet, costs spike all over the place — together with right here. We noticed it when Russia invaded Ukraine in 2022. We’re seeing it once more now.Norway is a helpful comparability — they’ve invested closely in renewables, electrified their heating and transport, and reformed their electrical energy markets so low-cost clear energy really reaches customers. This week their electrical energy prices are up round 17%. Ours are up round 60%. The distinction is gasoline dependency.
So what is the answer?
There is no single repair, however there is a clear path:
Scale back how a lot gasoline we’d like. Extra wind, photo voltaic and warmth pumps will get us nearer to self-sufficiency and fewer uncovered to world shocks. The know-how is prepared and getting cheaper yearly.
Reform our electrical energy markets in order that low-cost renewable energy really brings payments down. Proper now, even inexperienced electrical energy is priced in line with gasoline prices, and since the grid can’t at all times transfer energy from the place it’s generated to the place it’s wanted, we really pay wind farms to show off and gasoline vegetation to exchange them. That wasted wind price practically £1.5 billion final yr alone. Successfully, it’s a market design downside, not an vitality downside, and it is solvable.
Use home North Sea gasoline whereas we nonetheless want it, reasonably than importing it from areas weak to battle. This isn’t a silver bullet, and it will not carry costs down in a single day, but it surely makes extra sense than transport gasoline from the opposite aspect of the world.
Get on with nuclear, however do it effectively. New vegetation are not less than a decade away and authorities funding must be fastidiously managed. It is a long-term piece of the puzzle, not a short-term repair.
Are you saying fossil fuels are the reply?
Completely not. The long run repair is constructing extra wind and photo voltaic, switching properties off gasoline boilers and on to warmth pumps, and reforming the way in which our electrical energy market works in order that clear, low-cost energy really drives down folks’s payments. That is what will get Britain off the gasoline dependency that makes these crises so damaging.
Greg’s place on the North Sea is a practical short-term argument: whereas we nonetheless want gasoline, it makes extra sense to make use of what now we have at dwelling than to import it from areas weak to battle. It is not a inexperienced answer. It is a bridge whereas we construct one. However let’s be clear – it’s been 20 years because the North Sea might meet all our wants and it received’t carry costs down in a single day. It’s a bridge whereas we construct the true answer, not a vacation spot in itself.
What about fracking?
We don’t suppose fracking is a significant answer for the UK. Our geology is denser and fewer productive than the US, and any extraction would not make a major contribution to our gasoline demand. And past the practicalities, the environmental case towards it’s properly documented — the dangers to native water provides, soil and communities are very actual considerations. It is not a street we might wish to go down even when the economics stacked up.
So when does this get higher?
The know-how is there. Renewables are cheaper than gasoline. Batteries price a tenth of what they did ten years in the past. The barrier now’s market reform and political will. We will not management what occurs within the Strait of Hormuz, however we are able to management how uncovered we’re when it does.
That is what “vitality safety” really means.
What’s Octopus really doing about this — are you simply speaking about it?
We’re one in all Europe’s largest renewable vitality traders, with 4.9 GW of wind and photo voltaic tasks value £7 billion globally and £2 billion dedicated to new UK clear vitality by 2030. We manufacture our personal Cosy warmth pump to make inexperienced heating reasonably priced, and we have already constructed the UK’s first zero-bills neighborhood — 113 properties in Essex with photo voltaic, warmth pumps and a shared battery, with no vitality payments assured for ten years.
We’re additionally pushing exhausting for the market reforms that may really repair this — publicly campaigning for zonal pricing, which might save customers not less than £2 billion a yr and break the hyperlink between gasoline and electrical energy costs, so world crises cease hitting British households so exhausting.
We already know gasoline is not the long-term reply. Every thing we construct factors within the different path.
