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Natural gas price surge prompts warnings of higher UK winter energy bills

European and UK wholesale gas prices have hit three-year highs as Middle East supply disruptions and depleted storage raise concerns over consumer energy caps.

Updated Sep 3, 2026 · 14:19 UTC1 reports

The short version

  • Wholesale natural gas prices in the UK and Europe have surged to late-2022 highs due to delayed stockpiling and prolonged closures affecting the Strait of Hormuz.
  • British households face potential increases in their energy bills heading into early 2027 as higher wholesale costs feed into regulator price caps.
  • Energy analysts and industry executives caution that low domestic storage and potential winter cold snaps could exacerbate price pressures.
  • The ultimate impact on bills will depend on upcoming wholesale market shifts, winter weather severity, and government relief measures.

Key facts

  • European benchmark natural gas topped €75 per megawatt-hour and UK prices exceeded 185p per therm, marking the highest levels since late 2022.[BBC News]
  • Energy consultancy Cornwall Insight projects UK domestic energy prices could increase by 9% in the new year, following an already planned 4% rise in October.[BBC News]
  • Capital Economics senior climate and commodities economist Hamad Hussain estimated natural gas prices could exceed €80 by year-end, predicting the Strait of Hormuz may stay closed until early 2027.[BBC News]
  • Centrica CEO Chris O'Shea reported that the UK has minimal gas stored for the winter and warned the Rough storage facility would close next year without state support.[BBC News]
  • The Department for Energy Security and Net Zero stated that gas prices are set on international markets and highlighted plans to cut VAT from energy bills starting in October.[BBC News]

What remains uncertain

  • The extent of the January Ofgem price cap increase remains uncertain as wholesale markets could shift before final calculations are set.[BBC News]
  • How winter weather patterns and the developing Pacific El Niño will impact overall European heating demand and gas consumption is unknown.[BBC News]
  • The timeline for reopening transit through the Strait of Hormuz remains indefinite amid ongoing US-Iran hostilities.[BBC News]

Sources