Money expert Martin Lewis has urged households to act fast to secure lower energy bills for the Summer amid the volatile situation in the Middle East.
The United States and Iran agreed to an eleventh-hour ceasefire earlier this week, announcing a deal less than two hours before president Donald Trump’s deadline for Tehran to reopen the Strait of Hormuz.
The effective closure of the waterway over the past month triggered a massive spike in the price of oil and natural gas, hitting economies across the globe and prompting energy firms to pull most fixed-term deals from the market.
A fixed tariff energy deal guarantees that customers will pay for their energy at a set rate for a set period of time, usually a year. Meanwhile, those on a variable tariff will see their unit rate change with the energy price cap.
The price of oil and natural gas has begun to drop following the announcement of the ceasefire, prompting some energy firms to bring their fixed deals back to the market.
But this could be short-lived, Mr Lewis has warned.
The money expert wrote on social media: “Urgent. For 1st time in weeks, due to the ceasefire, there are a couple of energy fixes cheaper than the new April price cap. If things change they could disappear at speed. If you’re on the Cap and want to avoid the big hike in July, this does that.”
In February, Ofgem set the cap for April to June at £1,641, a reduction of £117 on average and broadly in line with Labour’s pledge to cut energy bills by £150.
This means that bills are effectively protected until July. A forecast from Cornwall Insight last week, made before the ceasefire was announced, found this could rise by as much as £288 for the average household.
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The cheapest fixed deal currently on the market comes from Outfox Energy, at 1.6 per cent below the current price cap. E.on is also offering a deal at 0.1 per cent below this level.
The volatility of the situation means that it is unclear how July’s price cap will now be impacted by the ceasefire, but experts and politicians have warned that is likely to still be much higher than any pre-conflict forecasts.
Graeme Downie, a Labour MP who sits on the energy select committee told The Independent on Thursday that “it will still take a long time for prices to return to normal” and the full impact of the crisis on the cost of living could be felt “until 2027/28 at least”.