Starting in July, energy bills are expected to decrease by £166 per year, attributed to President Trump’s tariff changes and milder weather conditions resulting in lower wholesale gas prices.

The energy regulator, Ofgem, is anticipated to announce a 9 percent reduction in a typical household’s annual energy bill, bringing it down to an average of £1,683, as projected by the energy consultancy Cornwall Insight.

The consultancy also suggests that additional price reductions may be possible in October and January, providing a rare moment of good news for consumers.

The expected decrease stems from a significant decline in wholesale gas prices, following the Trump administration’s introduction of comprehensive tariffs in early April, which raised concerns about a global economic downturn affecting gas demand. Since the announcement of these tariffs, wholesale gas prices have decreased by nearly 20 percent.

Furthermore, higher-than-average temperatures have reduced energy demand, further contributing to decreased prices, as noted by Cornwall. Their latest estimate is £29 lower than a previous projection made at the end of March, just before the tariffs took effect.

In April, energy costs for a standard household rose by 6 percent or £111 annually, escalating to £1,849, driven by increases in wholesale gas prices during the winter months, alongside diminishing Russian gas supplies to Europe and waning hopes for a peace agreement with Ukraine.

While current bills are lower than the peak levels witnessed during the energy crisis in 2022, when gas prices skyrocketed post-Russia’s invasion, they remain substantially above historical averages.

Cornwall Insight stated, “Although the dropping prices may seem favorable, they also reflect the market’s volatility. There are numerous factors at play, and with the July price cap still pending finalization, it’s premature to conclude whether these reductions will persist.”

Gas prices may decrease further if tariffs continue to suppress liquefied natural gas (LNG) prices from the United States and if the UK manages to secure its gas supply. Additionally, Europe might relax its gas storage requirements, leading to an increased supply in the market.

“However, broader geopolitical factors, including the ongoing conflict in Ukraine, the unpredictable nature of tariffs, and economic uncertainties could likewise drive prices back up,” added Cornwall Insight.

Craig Lowrey, a principal consultant at Cornwall, remarked, “We have seen markets fluctuate rapidly, and the swift decline in prices underscores their susceptibility to geopolitical and market changes.”

“The most effective way to shield households from this ongoing cycle of unpredictability is to lessen reliance on international wholesale markets. This entails boosting domestic low-carbon energy production and fostering a more secure, sustainable energy future,” he emphasized.

According to Uswitch, a price comparison service, households could enjoy even greater savings by switching to fixed-price deals. Currently, the lowest fixed-price offer is £1,591 annually for a typical household from the smaller supplier Outfox the Market, while the most affordable option among the six major suppliers is £1,623 annually with Eon Next.

Elise Melvin from Uswitch remarked, “While the anticipated summer drop in the price cap may provide some relief for struggling households, this predicted decrease is minimal compared to the potential savings available through a fixed-rate deal. Many households who haven’t switched in over a year are likely on a standard tariff, effectively wasting money.”