Why UK energy suppliers are pulling fixed tariffs and what it means for you

If you’ve been looking at switching energy deals recently, you might have noticed that fixed tariff offers are starting to disappear. Several UK energy suppliers have already begun pulling fixed energy tariffs from comparison sites and their own websites.

According to data from USwitch, the number of deals available fell from 38 on Saturday to 17 on Wednesday, while the cheapest have climbed from £1,509 to £1,640 a year. 

The move comes as global energy markets react to rising tensions in the Middle East, a region that plays a major role in global oil and gas supply.

Why energy suppliers are withdrawing fixed tariffs

Energy suppliers usually offer fixed tariffs when they’re confident about future wholesale energy prices. A fixed tariff locks in the unit price you pay for gas and electricity for a set period of time, typically 12 to 24 months. But for suppliers, offering those deals carries some  risk, especially when global markets become volatile, predicting future energy prices becomes much harder.

Tensions in the Middle East have increased concerns about potential disruptions to global oil and gas supplies. If suppliers offer fixed deals during periods of uncertainty, they risk locking customers into prices that could end up being lower than the wholesale price that they later have to pay for energy themselves. To avoid that risk, some suppliers temporarily remove fixed deals until markets stabilise.

Why events overseas can affect your UK energy bill

It might seem strange that events thousands of miles away could influence how much you pay to heat your home. But the UK energy market is closely linked to global gas markets. Currently, much of Europe, including the UK relies on internationally traded gas. When geopolitical tensions threaten supply routes or production, wholesale markets react almost instantly.

Those wholesale costs are a major factor in how energy suppliers price their tariffs. So when global prices jump, suppliers often adjust or withdraw deals while they reassess their cost base.

Does this mean energy prices are about to rise?

Not necessarily, but, energy suppliers sometimes remove tariffs simply because markets are moving quickly. It allows them to reassess their pricing models and launch new deals once they have a clearer view of wholesale costs. In many cases, tariffs return within days or weeks, sometimes at slightly higher or lower prices.

It’s also worth remembering that most households are currently protected by the Ofgem energy price cap, which limits what suppliers can charge customers on standard variable tariffs.

The price cap, which currently applies to just over 60 per cent of households, was set last week for the April to June period. But, consultancy Cornwall Insight  said on Wednesday, it (the price cap), could jump by about 10 per cent in July if wholesale prices stay at their current levels.

That means the situation could change quickly, and households may still see energy costs rise later in the year if wholesale prices remain high.

Should you fix your energy tariff now?

If you’re on a variable tariff, the sudden disappearance of many fixed deals might make you feel pressure to secure one quickly, but it’s important not to rush. Whilst a fixed tariff can offer peace of mind if you’re worried about future price increases, if wholesale prices settle or fall, locking in now could mean you paying more than necessary.

Before making a decision, you may want to:

• Check what tariff you’re currently on
• Compare the fixed deals that are still available
• Look at exit fees before switching
• Monitor how the market changes over the next few weeks

Energy markets can change quickly during periods of global uncertainty.

What to do if your energy supplier changes your tariff

If your energy supplier has withdrawn a deal, moved you to a different tariff, or given confusing information about your options, you have the right to complain.

Resolver can help you raise and manage complaints with your energy supplier, keep track of responses, and escalate the issue if necessary.

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk

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