UK household energy retailers are pulling back on fixed-price tariffs amid soaring wholesale costs driven by the Middle East conflict. Data from USwitch shows the number of available fixed deals plummeted from 38 on Saturday to just 17 by Wednesday. The cheapest deals have also risen sharply, from an annual cost of £1,509 to £1,640. This surge reflects suppliers' heightened risk management, as UK gas prices jumped roughly 75 per cent between Friday and Tuesday. Good Energy CEO Nigel Pocklington bluntly stated, 'You don’t know where the price is going to go, nor how many people are going to sign up' to fixed contracts.

The volatility stems from Middle East supply disruptions, pushing European and Asian gas prices higher. The UK, importing relatively little gas directly from the region, still faces price shocks competing with Asia and Europe for shipments. Higher gas prices also directly lift UK electricity costs, as gas-fired power stations generate nearly a third of the country's electricity. The current withdrawal of fixed deals echoes the 2021-22 energy crisis when gas prices spiked as economies rebounded and Russia invaded Ukraine.

While the UK price cap protects most customers until June, consultancy Cornwall Insight forecasts a 10 per cent July increase if wholesale prices persist. The retail sector continues grappling with the legacy of the 2021-22 collapse of dozens of suppliers, despite tougher capital rules. Households now owe a record £3.2bn to suppliers without repayment plans. Ofgem emphasized customers on fixed tariffs or the cap won't see immediate bill impacts.

Energy UK's Ned Hammond noted new fixed-price deals 'have to reflect the latest price movements' in this volatile environment.