Martin Lewis issues chilling price cap warning despite US-Iran deal | Personal Finance | Finance
Martin Lewis has explained why people will not see an immediate reduction in gas and electricity bills, despite the US and Israel agreeing to end hostilities. The money-saving expert already said yesterday (Monday, June 15) that the end of hostilities could lead to lower fixed tariffs on the market in the coming days.
That is due to the fall in the price of natural gas, with the cost of crude oil also dropping after the vital Strait of Hormuz was reopened. However, he also warned that prices have ‘a long way to fall before returning to pre-conflict levels’.
Mr Lewis also said that, barring a dramatic drop in the price of natural gas, the October price cap still looks set to rise ‘significantly’.
He was quizzed on social media as to why this was the case, with one user asking him: “Explain how the October price cap can be higher than the July one when the July (one) is based on prices from April to June and October is July to September, which will be lower than that.”
Mr Lewis responded: “It’s the same reason the energy Price Cap HASN’T yet risen due to the Middle East crisis. It is time-lagged. So slow to rise, slow to fall.
April Cap: 18 Nov 25 to 17 Feb 26
July Cap: 18 Feb 26 to 18 May 26
Oct Cap: 19 May 26 to 18 Aug 26
The person who asked the question responded: “Surely the July cap would still be higher by those metrics though, even if it’s starting a week before it went up, May to August overall is lower.”
Mr Lewis responded: “No, the first month of April cap wasn’t mid east conflict. Last two months were, and since Oct assessment period prices have been very high and that’s already banked in. The key is how much prices drop now. Even so Oct likely to be far higher than April, whether it’s higher or lower than July is more of an open question.”
US and Israeli strikes on Iran began on February 28, 2026, sending the price of oil and natural gas skyrocketing. In May, Ofgem announced that the July-September price cap would go up by 13.5 per cent. This would equate to £1,862 per year based on the average energy unit rate and standing charge for people who pay by direct debit in England, Scotland, and Wales.
It was a £221 increase on the previous price cap, which had until that stage been falling as the price of gas and oil gradually dropped. The April 1 to June 30 energy price cap – which was announced days before the US-Israeli bombing of Iran – went down by £117 or 7 per cent for a typical household who used electricity and gas and pay by Direct Debit. That meant a saving of around £10 a month.
Despite the cessation of hostilities, the October price cap is expected to rise even further unless – as Mr Lewis pointed out – there are major falls in the price of natural gas which – at this early stage – appear unlikely.
While oil prices have fallen since the end of the bombing announced over the weekend and are now hovering around $80 a barrel, they remain considerably higher than the $66 per barrel they were trading at before the war commenced.
