As of the 31st of March, Gas and Electricity Year Ahead Wholesale costs were higher than last month. Oil was also higher at $118 from $78.
Prices have started to fall today after President Trump announced that the US will leave Iran with or without a deal in the next two to three weeks. This provides hope that the Strait of Hormuz could reopen soon. Oil is currently much lower at $103.
The disruption to energy supplies and the concern for what may happen are being built into costs. In recent days markets have stabilised, but there is the possibility that there could be big price movements in either direction, depending on developments. About 20% of global Oil and LNG supplies are impacted by Iran effectively closing the Strait of Hormuz due to threats to shipping. There have been discussions to allow nations that Iran sees as friendly to pay a toll and to safely pass. This could ease some of the shortages.
The effect on customer’s contract renewals is currently significant when compared to more recent prices, although they are still far lower than we saw in 2022 and 2023. The eventual scale of these increases and over what period is very much an unknown, but we will continue to be available to discuss options and provide guidance.
The energy industry has changed how it recovers Electricity Distribution, Transmission and Balancing costs, under the Targeted Charging Review. This has moved some charges away from being based on the energy used and billed in the unit rate, to fixed charges incorporated within the Standing Charge or as separate items. This should give both the customer and the industry a more accurate way of calculating budgets, but the change has become noticeable within energy bills and created concern.
From April 2026 customers will have seen a large increase in Transmission costs with an expectation of further annual increases at least for the next five years. Distribution costs are a little more complicated, made up of Time of Use, Available Capacity and Fixed charges. Some of these charges are now based on a meter’s Band, which is related to a Half Hourly meter’s kVA Capacity. This means that by managing demand and reviewing the Capacity, there is an opportunity to reduce costs. Indigo Swan can provide you with guidance through this process.
The cost to Balance the network is increasing as is the Energy Intensive Industries (EII) charge, which provides relief from various industry costs for EII customers. This moves from 60% to 90% for the Network costs from April 2026.
Indigo Swan works closely with energy suppliers to help all our customers understand and manage changes.
Please contact us on 0333 320 0475 to discuss options or to get a latest update.
On the 31st of March, the Gas Year Ahead Wholesale cost was 126.58p/th, up from 98.49p/th in last month’s report and 20% higher than 2025. Today, the 1st of April, is seeing prices move lower with President Trump stating that the US will leave Iran with or without a deal in the next two to three weeks. This provides hope that the Strait of Hormuz could reopen soon.
EU Gas Storage remains a concern although withdrawals have slowed and is now 28% full compared to 34% in 2025 and 59% in 2024. We would normally expect Gas to start being diverted into Storage in readiness for the winter. With up to 20% of LNG from the Middle East being disrupted and with the higher global demand for supplies inflating costs, Storage levels will be closely monitored by markets. From January 2027 the current plan is for the EU to ban Russian LNG, a decision which may have to be reviewed.
There is already significant damage to infrastructure in the region, including a Qatar owned LNG facility, that they estimate will take up to five years to repair, so even when hostilities end, pressure on supplies will remain.
We would encourage any customer with a contract that ends in the next few months, to discuss your renewals with us and we will look to provide additional market intelligence where required, guidance and support, for your unique circumstances.
On the 31st of March, the Electricity Year Ahead Wholesale cost was £99.24/MWh, up from £84.91/MWh in last month’s report and 13% higher than 2025. Today, the 1st of April, is seeing prices move lower with President Trump stating that the US will leave Iran with or without a deal in the next two to three weeks. This provides hope that the Strait of Hormuz could reopen soon.
We are still very dependent on Gas to generate Electricity due to Renewables being unreliable and with no large-scale Storage of Electricity to capture excess supplies. With Gas being an expensive form of generation, this sets the direction for Electricity Wholesale prices. In March, Wind accounted for 30% of supplies and Gas just 24%, down from 31% in February. The Interconnectors with mainland Europe which allow both Imports and Exports, are an important part of our energy mix and will be more so, with plans for further integration.
The conflict in the Middle East is the focus for prices, with Gas and Electricity sometimes showing large daily swings with a threat to shipping passing through the Strait of Hormuz and damage to energy infrastructure.
We would encourage any customer with a contract that ends in the next few months, to discuss your renewals with us and we will look to provide additional market intelligence where required, guidance and support, for your unique circumstances.
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