20th September 2026
For households across Britain, the energy crisis of 2022 can still feel like a fairly recent memory. Now the gas market is beginning to send another warning, although the circumstances are different this time.
Wholesale gas prices have been rising sharply as Europe prepares for winter with gas storage levels lower than normal and international competition for liquefied natural gas increasing.
European gas storage was around 67% full in early September, well below the levels seen at the same point in the previous two years. Industry analysts are warning that a cold winter, combined with continuing disruption to LNG supplies, could push prices considerably higher.
That does not mean Britain is about to run out of gas.
The more immediate concern is that Britain may have to pay considerably more to obtain it.
Europe is competing with Asia
Gas is now very much a global market.
Europe has been buying increasing quantities of LNG to replace supplies that once came through Russian pipelines. At the same time, Asian countries such as China, Japan and South Korea also need LNG.
China has an additional advantage because it is able to obtain increasing quantities of pipeline gas from Russia. That can reduce China's dependence on internationally traded LNG, potentially leaving more cargoes available for European buyers.
But that does not necessarily make the gas cheap.
Europe still has to compete with other buyers for the supplies that can be moved around the world. Reuters has reported warnings from the gas industry that Asian LNG prices could rise substantially during a particularly cold winter, forcing European and Asian buyers into a much more intense competition for available cargoes.
There is therefore a potentially uncomfortable chain of events.
A cold winter would increase demand for heating. Low European stocks would make buyers more anxious. Europe could then bid more aggressively for LNG, pushing international prices higher.
Britain would feel that through its wholesale gas market.
What does that mean for households?
There is one important protection for millions of British households.
The Ofgem price cap means that suppliers cannot simply pass every movement in wholesale prices straight on to households overnight. The cap is reviewed every three months.
From 1 October, the average price cap for a household paying by Direct Debit will be £1,723 a year, up 4% from £1,663. The average gas unit rate will rise from 7.33p to 7.97p per kWh.
That does provide some protection.
But it is important to understand what the price cap does not do.
It does not guarantee that a household will pay £1,723. It limits the unit rates and standing charges that suppliers can apply to standard variable tariffs. A household that uses more energy will pay more.
More importantly, if wholesale gas prices remain high, those costs can eventually feed into a future price cap.
The January to March 2027 cap will therefore be particularly important. What happens in the gas market during the autumn and early winter could influence what households pay later in the heating season.
Wick has an advantage
There is an interesting local dimension to this for Caithness. People in Wick and other areas connected to the mains gas network may be feeling relatively fortunate this winter.
They have the Ofgem price cap. Many households elsewhere in Caithness and the Highlands do not.
Large numbers of rural homes rely on heating oil, and heating oil is not covered by the Ofgem price cap.
That creates a very different form of risk.
If wholesale gas prices rise, the impact on a gas customer is filtered through the regulated price-cap system. A heating-oil customer buying 500 litres, however, is exposed much more directly to the market price at the time the tank needs filling.
That can make rural households particularly vulnerable to sudden increases.
And it is worth remembering that heating oil is not simply a rural version of mains gas. Deliveries involve transport costs, local competition, storage capacity and the timing of purchases. Someone who has to fill an almost empty tank in the middle of a cold spell has rather less flexibility than someone who can postpone a purchase for a few weeks.
Electricity is caught in the middle
There is another complication.
Gas prices matter even to households that do not heat their homes with gas because gas-fired power stations remain an important part of Britain's electricity system.
When gas becomes expensive, it can increase the cost of generating electricity at times when other sources are not producing enough.
There is some help coming from the removal of VAT on domestic electricity between October and March. Ofgem says electricity will have no VAT during that period, while gas will continue to carry 5% VAT.
That will help electricity users, particularly households that use electricity for much of their heating.
But it does not eliminate the underlying problem of volatile energy markets.
The weather could decide the outcome
This is probably the biggest unknown.
Europe can cope with relatively low storage levels if the winter is mild and supplies continue arriving.
It is a very different situation if Britain and continental Europe experience a prolonged cold spell while Asian countries are also competing for LNG.
The gas industry is therefore watching the weather almost as closely as the markets.
There is also an important difference from the 2022 crisis. Europe has since increased LNG import capacity, reduced its dependence on Russian pipeline gas and changed the way supplies move around the continent.
The House of Commons Library notes that energy prices have fallen considerably from their 2022 peaks, but remain well above pre-crisis levels. The October 2026 price cap will leave typical household bills around 58% above their winter 2021/22 level.
So this is not another 2022 at present.
But the market is becoming uncomfortable enough that complacency would be unwise.
Rural households may feel the squeeze differently
For households in Caithness, there is an irony here.
A household in Wick with mains gas may be thinking that at least it has the protection of the price cap.
A household a few miles outside the town, relying on heating oil, may be looking at the oil tank and wondering when to order the next delivery.
Neither household is completely insulated from the international energy market.
The difference is that the gas customer's exposure is partly smoothed by the regulatory system, while the heating-oil customer is much closer to the market price.
That makes energy planning particularly important for rural households.
The sensible conclusion is not to predict another energy crisis. There are too many variables, particularly the weather, LNG supplies and international demand, to know how high prices will go.
But the warning from the gas market is clear enough.
Energy is becoming expensive again at exactly the time of year when households are preparing to heat their homes.
For many people, particularly those on fixed incomes, the question this winter will not simply be whether they can afford to heat their home.
It will be how much of their household budget they have to sacrifice to do it.