Martin Lewis’ worrying Ofgem energy warning as prices soar – ‘we have to hope’ | Personal Finance | Finance

Posting on social media, Lewis described the charts as “two depressing graphs” that highlight how close oil prices are getting to the levels reached when Russia’s invasion of Ukraine triggered a global energy shock.

“The first is the price of oil, which drives petrol costs, heating oil costs, and risks knock-on inflationary costs including food as the cost of transporting anything increases,” he said.

“This isn’t too far from the peak of the Russia-Ukraine crisis.”

Oil prices influence a wide range of everyday costs including petrol, logistics and manufacturing, meaning sustained increases can push up inflation across the economy.

Lewis noted that the situation for gas is slightly different, although prices have still risen sharply since the latest geopolitical tensions began.

Natural gas is a key driver of electricity prices in the UK because gas-fired power stations set the wholesale price of much of the country’s electricity.

Lewis said gas prices have roughly doubled since the conflict escalated, but remain significantly below the record highs seen during the 2022 energy crisis.

*** Ensure our latest news headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings. ***

“While it’s doubled since the conflict started, it is still at the moment far short of the Russia-Ukraine peak,” he explained.

However, he warned that the length of time prices stay elevated could be just as important as the size of the spike.

“With both though, ultimately the height of the rise is only one factor. Just as important is how long it lasts.”

Lewis also raised concerns about the stability of the UK energy market if wholesale prices remain volatile.

Responding to a social media user who suggested energy companies would benefit from the price rises, he said the reality is more complex.

“For generators and distributors almost certainly,” he said, referring to potential profits for firms producing or transporting energy.

But he added that the situation is very different for suppliers who sell energy directly to households.

“The opposite for retailers which is why we have to hope the stress testing Ofgem did works so we don’t see any go bust.”