Martin Lewis Reveals Falling Gas Prices Could Bring Cheaper Energy Deals for UK Households Within Days

UK households could see cheaper fixed energy deals launched within days after wholesale gas prices fell, according to money-saving expert Martin Lewis, offering a rare and immediate glimmer of relief after years of elevated bills.

Lewis said easing tensions between the United States and Iran have already pushed down wholesale natural gas prices, the key cost component suppliers use when pricing new fixed-rate tariffs. Because fixed deals respond far faster to market movements than the regulated price cap, he believes suppliers could begin rolling out slightly cheaper options almost immediately.

'The US and Iran signing a framework deal has pushed natural gas prices down. These wholesale prices are a key driver of UK gas and electricity bills,' Lewis said in a video posted on Instagram on 15 June.

Using market charts, Lewis showed wholesale gas prices slipping by around 2 per cent following the diplomatic breakthrough. Crude oil prices also fell by roughly 4 to 5 per cent, about $8 per barrel, as fears of prolonged supply disruption eased. While the drops are modest, Lewis stressed that even small movements can quickly influence fixed tariffs.

Crucially, he drew a clear distinction between new fixed deals, which can appear within days, and the energy price cap, which moves far more slowly and is set by the regulator.

'The good news is that this could lead to slightly cheaper fixed tariffs being launched in the coming days,' Lewis said. 'However, without substantial further drops, the October price cap still looks likely to be significantly higher than it is today.'

Around 60 per cent of homes across England, Scotland and Wales remain on standard variable tariffs, meaning their costs are governed by the price cap rather than market-led fixed deals. Those households are unlikely to see immediate bill reductions, even as wholesale prices edge down.

Why Fixed Deals Can Move Faster Than Bills

Wholesale prices feed into supplier costs almost instantly, allowing firms to adjust or relaunch fixed tariffs quickly when markets soften. By contrast, the energy price cap is reviewed periodically and does not react to short-term movements.

From 1 July, the cap is expected to rise, with households using a typical amount of energy and paying by direct debit facing annual bills of £1,862 — £221 higher than the previous level. The figure often quoted as a 'typical household bill' is not a fixed amount and varies according to usage, property size, efficiency and weather.

Under assumptions used by Ofgem, a typical household was previously estimated to use 11,500 kWh of gas and 2,700 kWh of electricity a year. Those figures have since been revised to reflect lower consumption, as many households have cut usage and improved efficiency.

Using updated estimates of 9,500 kWh of gas and 2,500 kWh of electricity, the average annual bill from 1 July would be closer to £1,663, according to BBC News.

Still Far From Normal — but Moving in the Right Direction

Before tensions escalated in the Middle East, the UK energy price cap had been falling steadily. Renewed conflict involving the United States and Iran, alongside concerns over shipping routes such as the Strait of Hormuz, disrupted supply and sent wholesale prices higher.

Although oil and gas prices have since eased, they remain above pre-conflict levels. Oil was trading at around $66 a barrel beforehand, underscoring why any near-term relief is likely to be limited.

Lewis has repeatedly warned that the latest falls do not mark a return to cheap energy. Instead, he describes them as an opportunity window in which suppliers may cautiously re-enter the market with more competitive fixed deals.

That assessment is echoed by energy economists. In a previous interview with IBT UK, Dr Diane Merians Penaloza, a doctoral lecturer of business at the City University of New York School of Professional Studies, said meaningful price corrections could take years.

'I don't think prices are going to get better in the near term,' she said. 'We're probably four or five years away from a significant price shift.'

For now, Lewis is urging households to stay alert rather than expect automatic savings. Falling wholesale prices may not cut bills overnight, but they do create the conditions for cheaper fixed energy deals to emerge and, for the first time in months, that could happen within days.