The Iran war has caused oil and gas prices to soar, according to multiple reports. Octopus Energy CEO Greg Jackson said the wholesale price of gas has roughly doubled since a week ago. He added that Iran has effectively closed the Strait of Hormuz, which transports 20% of the world's oil and gas supplies, and that Qatar has said it cannot honour its contracts to deliver its gas.
The introduction of exit fees has affected fixed energy deals. According to Uswitch, the number of fixed energy deals available has more than halved since the attacks between Iran and US-Israeli forces began. Most UK households are on variable deals protected by the energy price cap. The energy price cap means typical bills will fall in April, but experts predict a 10% rise from July due to higher gas prices. Greg Jackson explained: "Fixed tariffs are based on the fact the day you want to take out a fixed tariff, the energy company goes to the wholesale market and buys a year's worth of energy for you, and because the wholesale market are now reflecting at least some of the cost increases from the effects of the war in the Middle East, new fixed tariffs are then higher." He added: "Some companies won't offer them at all because they are not confident in being able to lock in those prices a year in advance. Where you are seeing fixed tariffs they are now typically a hundred pounds a year more expensive than a year before the conflict."
Incredibly poor customer service from @OctopusEnergy to put the exit fees up from £0 to £50, then to £75 all in one week for customers looking to switch tariffs. Shameful.
Customers have expressed frustration on social media. One user wrote: "Incredibly poor customer service from @OctopusEnergy to put the exit fees up from £0 to £50, then to £75 all in one week for customers looking to switch tariffs. Shameful." Another customer, DarkAngel, said: "Should be illegal. Why changed the rates too compared to last year." MSH questioned: "So will your prices come down when this gulf war ends, you were very quick to raise the price of gas by 50% the day after it started, smacked of profiteering to me, not the company you once were Octopus Energy @OctopusEnergy." Clive asked: "Will the exit fees be removed as soon as the energy makers settles down. What's your threshold for this ?" Minty commented: "Another company on the list that is sucking every penny from us, I bet you post massive profits." DevonDad said: "If you have to sell the energy because customers leave early and you make a profit on it can we have ant money back? Thought not. When my contract ends you'll lose my custom."
The company responded to concerns, stating: "Tariff rates change all the time with wholesale fluctuations - the volatility can be unpredictable sometimes, so locking in a fix means we buy 12 months of energy to secure a unit rate. Rates for anyone already on a fix don't change. We'll continue to monitor wholesale costs closely as always & update our tariffs when we must - dropping rates as quickly as possible."
Should be illegal. Why changed the rates too compared to last year.
It remains unclear what the exact percentage increase in wholesale gas prices has been since the conflict began, how long the exit fees will remain in place, and whether Octopus Energy will reduce prices when the conflict ends. The total number of fixed tariff deals currently available compared to before the conflict is also unknown, as is whether other major suppliers are introducing or increasing exit fees.
So will your prices come down when this gulf war ends, you were very quick to raise the price of gas by 50% the day after it started, smacked of profiteering to me, not the company you once were Octopus Energy @OctopusEnergy
Will the exit fees be removed as soon as the energy makers settles down. What's your threshold for this ?
Another company on the list that is sucking every penny from us, I bet you post massive profits.
If you have to sell the energy because customers leave early and you make a profit on it can we have ant money back? Thought not. When my contract ends you'll lose my custom.
Tariff rates change all the time with wholesale fluctuations - the volatility can be unpredictable sometimes, so locking in a fix means we buy 12 months of energy to secure a unit rate. Rates for anyone already on a fix don't change. We'll continue to monitor wholesale costs closely as always & update our tariffs when we must - dropping rates as quickly as possible.
These are changes we genuinely dislike making. With a fixed tariff, we buy 12 months of energy upfront at the prices available that day, which keeps your bills steady regardless of how the market changes later. We typically don't do exit fees and instead just absorb the cost if customers leave early, but the current, super volatile market makes that trickier. To keep giving customers the best price possible, we need to introduce an exit fee for new fixed tariff sign-ups. We're here to help and can chat through options, just send across a DM. The current, super volatile market makes everything really tricky. To keep giving customers the best price possible, we need to introduce an exit fee for new fixed tariff sign-ups. If you're already on a fix, don't worry, your terms haven't changed.
Fixed tariffs are based on the fact the day you want to take out a fixed tariff, the energy company goes to the wholesale market and buys a year's worth of energy for you, and because the wholesale market are now reflecting at least some of the cost increases from the effects of the war in the Middle East, new fixed tariffs are then higher.
Some companies won't offer them at all because they are not confident in being able to lock in those prices a year in advance. Where you are seeing fixed tariffs they are now typically a hundred pounds a year more expensive than a year before the conflict.
I am keeping a very close eye on the situation. In energy terms, Iran has effectively closed the Strait of Hormuz, which transports 20% of the world's oil and gas supplies, and Qatar has said it cannot honour its contracts to deliver its gas, so the energy markets are in a state of turmoil. The wholesale price of gas has roughly doubled since a week ago.