The severity of the 2021 gas crisis had catastrophic effects in the UK and it continued till 2022. In 2023 and 2024, the country survived this fuel poverty, however, the price is expected to rise in 2025, according to major price forecasts.
The over demand and stable supply have already increased the UK gas price more than expected over the third quarter, and energy experts have various price forecasts regarding the next quarter, with some expecting a price decrease, and some forecasting an increase.
According to the trading economic models and expert analysts, the UK Gas Market is aiming for a significant boom in 2025. The prediction is based on the inevitable scarcity in the coming years. However, domestic customers are not happy with the hike in the price, and they expect emerging technologies to tackle this issue by providing renewable and affordable energy sources.
UK Gas Price – From Pandemic To Present Scenario
2021 witnessed the aftereffects of the pandemic and the conflicts between Russia and Ukraine aided this. The global inflation crisis and the increased cost of living in the UK were reflected in the gas prices.
In April 2022, the gas price cap increased by 54%, with an annual energy price of £1,971. This record high was the direct result of the reduced supply after the pandemic. To stop the further increase to around 80%, the UK Government intervened by forming a temporary measure called the Energy Price Guarantee. It allowed the domestic customers to pay a reasonable amount by limiting the increase to 27% in the next quarter.
The 3rd quarter also witnessed a decrease in the price and despite the increase in Q4 2022, a year after, 2023 Q4 had another 5.3% decrease. This year, the situation is exactly the opposite. The recent climate-related issues and the increase in the inflation rate pose a severe risk of experiencing a sudden increase in the coming quarters.
Natural Gas Price Over The Years – The NBP Data
Here is a list of differences in gas prices over the past years. The price is in British Pence per therm and the data is based on the UK National Balancing Point (NBP).
- October 2016 – 42.83
- October 2017 – 45.4
- October 2018 – 66.53
- October 2019 – 25.6
- October 2020 – 38.23
- October 2021 – 213.76
- October 2022 – 109.26
- October 2023 – 102.17
- October 2024 – 100.87
Gas Price In The UK: Major Predictions For 2025
According to Cornwell Insights, a trusted provider of forecast models, we can expect a slight price fall in January 2025. Their quarterly prediction for January to March 2025 shows a total of £1,697 in the energy price cap. £814.51 is attributed to the gas alone.
Previously, the institution predicted an increase, however, the increase in the global supplies of LNG (Liquid Natural Gas), and the meeting of gas storage targets demanded another analysis, which resulted in a decrease in the price. But Cornwell expects an increase in the next quarters of 2025.
UBS, a Wall Street financial services company, projects a 2% increase in European gas prices around the first quarter of 2025. The delay in the construction of nuclear resources and LNG projects will further increase the price cap throughout 2025.
Final Thoughts
There are various things at play, like climate change and geopolitical factors, in determining gas prices. The uncertainty regarding these issues makes it difficult to create a forecast model. And, various other issues also should be considered in the energy economy.
According to various energy experts, the foundational rules of the UK energy system should be repaired for a sustainable future. The standing charge system, the way of creating a fixed amount to pay on your energy bill regardless of the use, is considered by many as a system to be abolished.
A recent survey by Ofgem shows that around 90% of participants among the 30,000 responses think that the standing charge system is unfair. Participation of the citizens is necessary while we deal with such a sensitive issue, and affordability and environmental-friendly use cases should be considered primary than the price correction models of market manipulators.
UK at Risk of Future Energy Crises and Price Spikes, Experts Warn
