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Domestic energy prices: In short

The prices paid by UK households for energy increased rapidly from mid-2021, peaking during the energy crisis in 2022 and 2023. This followed years of relative stability. Prices since have fallen back from their peak levels, but they are still well above pre-crisis levels. They increased in early 2026 (sharply for heating oil) after the start of the Israel/US-Iran conflict.

The prices most households pay for gas and electricity are set by the energy price cap which is revised each quarter. There is some regional variation in prices under the cap and differences by payment method. Some fixed-term energy tariffs (outside the cap) offer lower prices.

Electricity prices in the UK are higher than in most of the EU, UK gas prices are below average and heating oil is cheaper in the UK than anywhere in the EU.

Sources: Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026; ONS series D7DU, D7DT, D7DW, D7DV and D7BT;  Eurostat, Electricity price statistics & Natural gas price statistics; DESNZ, International domestic energy prices (Tables 5.6.2 & 5.10.2); EC, Weekly Oil Bulletin

How have energy prices changed?

Longer-term trends in gas and electricity prices

Real (inflation-adjusted) gas and electricity prices were stable or falling in the late 1990s and early 2000s (as shown in the following chart). This means any price increases were no larger than inflation (that is, the general increase in all prices).

There were substantial real increases in the prices of both fuels between 2005 and 2009, and again in the early 2010s. Electricity prices increased in real terms in the late 2010s, while gas prices fell.

The chart clearly shows the jump in prices in April 2022 (when the energy price cap increased, see below) and October 2022 when the government’s Energy Price Guarantee set maximum prices which were below what they would have been under the cap.

Prices have fallen back from their peak levels, but in May 2026, gas prices were 14% higher than their January 2020 level in real terms, and electricity prices were 13% higher.

Source: ONS series D7DU, D7DT and D7BT

Heating oil and coal prices

The briefing Households off the gas-grid and prices for alternative fuels provides more detailed analysis of prices of other types of domestic fuels.

Heating oil prices are closely linked to crude oil prices, so they are highly volatile and frequently linked to major global events, such as conflicts, the 2008 financial crisis and the pandemic. This is illustrated in the chart below showing real price changes.

Real heating oil prices fell in the mid-2010s and at the start of the pandemic. There was a particularly sharp increase in oil prices in March 2022 (resulting from Russia’s full-scale invasion of Ukraine) and a peak in June 2022, before generally falling to early 2026. The spike in March 2026, linked to supply disruption following the start of the Israel/US–Iran conflict, was sharper than those in 2022; prices almost doubled in one month.

Typical mid-month prices for heating oil were 104 pence per litre in March and April 2026, surpassing the previous peak in June 2022.

Domestic prices for coal (also shown below) have been much more stable. There were real increases in the late 2000s and during the energy crisis. Subsequent price falls have meant that the real level in May 2026 was only around 7% above the level it was at throughout the 2010s.

Source:  ONS series D7DW, D7DV  and D7BT

Prices for gas and electricity under the energy price cap

The ‘Default Tariff Cap’ for gas and electricity, also known as the energy price cap, came into force at the beginning of 2019. It followed the introduction of tariff caps for customers on prepayment meters in April 2017 and for vulnerable customers in February 2018. It was originally intended as a safety net measure for the minority of customers who did not shop around for cheaper tariffs. Since the energy crisis it has effectively set prices for most customers.

Operation of the energy price cap

The cap applies where a customer has not signed up for a fixed-term contract with their supplier. The regulator Ofgem revises the cap each quarter. It sets maximum prices for a unit of energy and daily standing charges for customers in each energy supply region of Great Britain. There are separate caps for gas and electricity. The cap does not limit annual bills, which depend on how much energy a customer uses.

Ofgem combines these capped prices and standing charges with ‘typical’ annual consumption figures to produce an illustrative annual bill in each region. These regional levels are averaged to give the headline figure for Great Britain.

The only time the price cap did not apply was at the height of the energy crisis, from October 2022 to June 2023, when the government paid energy suppliers to keep prices down under the Energy Price Guarantee (EPG). See the Commons Library briefing paper Domestic Energy Prices for further background on this and other elements of support during the energy crisis.

Changes in the price cap

In the first years of the cap, its level did not change much. But in early 2022 Ofgem announced that the cap would increase in April 2022 by 54% from the annual equivalent of £1,215 to £1,877; a 54% increase. The increase in the next cap (fourth quarter of 2022) was planned to be a further 80%, as shown below. Both increases were largely due to higher wholesale energy prices.

Source: Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026

Customers were protected from the October 2022 increase by the EPG, which limited price increases to 26% (with the government paying energy suppliers the difference between the cap and the EPG). The EPG was introduced in October 2022 and kept prices constant until June 2023. The level of the cap fell for much of the following year and has subsequently varied between £1,640 and £1,860.

The next chart shows the underlying unit prices under the cap (Or the EPG from October 2022 to June 2023). The latest unit prices for gas are around 120% higher than their mid-2021 levels, while electricity prices are 38% higher.

Source: Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026

What has driven recent changes in gas and electricity prices?

Wholesale energy prices

Changes in the wholesale price of energy were the dominant factor behind the rapid increase in domestic energy prices in 2022 and early 2023, and the smaller drop in prices in late 2023 and 2024. The chart below isolates wholesale costs from other elements of the price cap.

Source: Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026

The next chart looks at wholesale prices for gas on the spot market (for immediate delivery). It shows the rapid rise in prices in late 2021 and the spike/general volatility following Russia’s full-scale invasion of Ukraine in February 2022. The operation of the price cap, and how suppliers buy energy, mean that there is a delay before changes in prices on the spot wholesale market feed through to customers on the cap. The briefing Gas and electricity prices during the ‘energy crisis’ and beyond looks at the reasons for this.

Source: nationalgrid.com Prevailing View tool (system average price)

Wholesale electricity prices are closely linked to gas prices and have followed broadly similar trends.

What other costs make up the price cap?

The table below shows the broad cost elements of the latest price cap. These are determined by Ofgem from i) data on costs that are passed on by suppliers and ii) Ofgem’s estimates of the costs that an efficient supplier themselves would incur. It includes an element for supplier profit (‘earnings before interest and tax’).

Source: Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026

Network costs

Network costs are the next most important component of the price cap making up almost 30% of the total. They are intended to cover the costs that suppliers must pay for use of the transmission and distribution networks for gas and electricity.

Network costs have increased steadily in recent years. For more background on the reasons for higher electricity network charges see the briefing What costs make up an electricity bill?

Operating, debt and industry charges

This category includes allowances for the core operating costs of suppliers (billing, metering, and customer service), bad debt (customer debts that are unlikely to be repaid) and the charges that suppliers are required to pay to various industry bodies.

Policy costs

Policy costs are levies on bills linked to government policies. These mainly cover support for renewable generation and help for vulnerable customers (through the Warm Home Discount). The government cut these costs in April 2026 by ending a levy-funded scheme for energy efficiency and shifting funding for the largest renewable generation support scheme to general taxation.

Policy costs do not include the costs of the Contracts for Difference scheme, which supports new low-carbon energy generation. Ofgem includes these costs within the wholesale costs category. For more background on this and other policy costs in electricity bills see the briefing What costs make up an electricity bill?

Variations in prices by region and tariff

The table below looks at the latest data on variations in the price cap for different parts of the country and differences in annual bills by tariff, payment and supplier type. They all assume the same typical levels of consumption as the earlier data on the price cap.

Sources:  Ofgem, Energy price cap levels 1 July to 30 September 2026. Final levelised cap rates model (Annex 9), 23 May 2026; Ofgem, Data portal -Retail market indicators

The differences in the price caps between regions are smaller than the differences between the cap itself and the cheapest tariffs offered by different types of supplier, and between the cap and the cheapest tariff by payment method. The average fixed tariff offered in May 2026 was above the price cap, reflecting supplier expectations that the cap would increase in the future.

How do energy prices vary across Europe?

Gas and electricity

In the second half of 2025, household electricity prices in the UK were higher than in all but three EU states, and they were 18% above the EU average. UK gas prices for households were 34% below the EU average and less expensive than in all but seven EU states.

Trends in prices in the UK and EU, for six-month periods, are shown in the following charts. These highlight prices in the UK, France, and Germany, plus other countries with high prices in recent years.

Sources: Eurostat, Electricity price statistics & Natural gas price statistics; DESNZ, International domestic energy prices (Tables 5.6.2 & 5.10.2)

UK domestic electricity prices were already more expensive than nearly all EU states in 2020. Above-average price rises in the UK in late 2021 and 2022 meant its prices increased to well above those anywhere in the EU. Lower prices in the UK have meant it has been third or fourth highest (out of the EU and UK) in the past two years.

Increases in UK gas prices during the energy crisis meant that its prices were temporarily among the most expensive in the first half of 2023.

This data includes taxes and levies on energy. Some countries use levies to pay for energy-related policies. Others fund these policies from general taxation. This means consumers in some countries may face lower energy prices, but ‘pay’ for this through higher taxes and vice versa. Taxes and levies on electricity in the UK were above those in most EU countries, while those on gas in the UK were below those in moist of the EU.

Similarly, support for households may be delivered through controls on prices or through cash transfers (such as the Warm Home Discount) which do not show up in price statistics. Comparisons based on headline prices alone therefore do not necessarily compare like with like and should be viewed with caution.

Heating oil

Average consumer prices for heating oil are cheaper in the UK than anywhere in the EU. In mid-June 2026 the UK figure was 76.6 pence per litre. The cheapest in the EU was Malta at 86.9 pence per litre. There are relatively small differences in pre-tax prices, but taxes and duties on heating oil, particularly VAT, are higher across the EU than in the UK.

Local data

The tables at the end of the briefing Gas and electricity prices during the ‘energy crisis’ and beyond give a breakdown of the current price cap by energy supply region and payment method. A separate price cap is set for each of the 14 regions and applies throughout the region. This means there is no further geographical breakdown of prices or typical bills below regional level.

Further information

Readers may be interested in the following related briefing papers from the House of Commons Library:

• Gas and electricity prices during the ‘energy crisis’ and beyond
• Households off the gas-grid and prices for alternative fuels
• What costs make up an electricity bill?
• Domestic energy prices
• Energy efficiency of UK homes
• Energy standing charges
• Help with energy efficiency, heating and renewable energy in homes

Collections of data on energy prices can be found at:

• Domestic energy price statistics (DESNZ)
• Retail market indicators (Ofgem)
• Wholesale market indicators (Ofgem)