British energy suppliers are rapidly withdrawing fixed-price tariffs from sale as the US-Israel conflict with Iran drives wholesale oil and gas costs sharply higher.
It dramatically reduces the number of available deals for households seeking to lock in their energy prices.
According to price comparison site Uswitch, the number of fixed tariffs available to customers has fallen by more than half since Saturday while the remaining deals have become significantly more expensive.
Energy UK, the industry body representing suppliers, stated that heightened volatility in wholesale fuel markets has created major challenges for companies attempting to guarantee energy prices for consumers over longer periods.
The conflict in the Middle East has disrupted both the production and transportation of oil and gas across the region, with operations slowing dramatically or halting entirely in several cases.
The instability in global energy markets is now directly affecting the options available to British households searching for new tariffs.
Uswitch data covering the entire UK energy market shows how sharply consumer choice has contracted over just five days.
On Saturday, customers could choose from 38 fixed tariffs, but by Thursday that number had dropped to just 15 options.
Suppliers are rapidly withdrawing fixed-price tariffs from sale
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Prices have also risen significantly during the same period, with the cheapest fixed deal increasing from £1,509 to £1,640 while the most expensive climbed from £1,898 to £2,194.
Although suppliers frequently adjust their tariffs as part of normal competition within the market, analysis by comparison site MoneySuperMarket suggests withdrawals have accelerated rapidly this week.
The company recorded 65 tariffs being removed for repricing or withdrawal since Monday compared with just 14 removals during the previous week.
By contrast, the weeks commencing February 16 and February 9 saw only 19 and 11 tariffs removed respectively, highlighting the scale of the recent shift.
Some of the UK’s largest energy suppliers have already pulled their fixed-rate deals
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Among the so-called Big Six suppliers, British Gas, Ovo and Scottish Power have withdrawn their fixed tariffs from the market.
Octopus Energy and EDF confirmed they are continuing to offer fixed deals to customers, while E.On is also understood to still have a fixed tariff available.
However, Octopus has responded to the recent volatility in wholesale energy markets by temporarily introducing exit fees for new customers who sign up to fixed tariffs.
An Octopus spokesperson said: “We can no longer absorb the full cost of the energy we buy in advance for new fixed-tariff customers if they choose to leave us during the period of the fix.”
The company added that while exit fees are standard practice among many suppliers across the market, introducing them represents an unusual step for Octopus.
Consumers who remain on variable tariffs are currently protected from immediate price rises until at least July because of the energy price cap set by regulator Ofgem.
Households that are already locked into fixed deals will continue to pay their agreed rates until the end of their contracts regardless of movements in wholesale markets.
Nevertheless, Energy UK’s deputy policy director Ned Hammond warned continued pressure in gas markets could still affect future price caps.
Energy is putting upward pressure on inflation
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He said: “Should current gas prices remain as high as they are for several more weeks, this could have a material impact on future price caps.”
British Gas explained it has shifted its focus toward more flexible options for customers during the current period of market uncertainty.
A spokesman said: “As a result of uncertainty in the global energy market, we are focusing on more flexible options for customers like our new Cap Tracker tariff that will always be priced below the cap.”
EDF said it is continuing to monitor market conditions closely while remaining committed to providing competitive energy options for customers.
