Ofgem warns of 'difficult winter' as regulator considers charge that would block cheaper energy deals

Martin Lewis has called Ofgem's proposed Market Stabilisation Charge "a form of switching penalty" that would make cheap fixed deals significantly more expensive, even if wholesale prices fall sharply. The regulator launched a consultation today on reintroducing the mechanism, which was last active from April 2022 to March 2024 after Russia's Ukraine invasion sent more than 30 suppliers bust. Ofgem's interim director general Neil Kenward insisted activating the charge would not automatically raise bills, but critics say it protects supplier profits at households' expense.

A fall in wholesale prices exceeding 10% would activate the charge, requiring any supplier that attracts a new customer to pay their former supplier 85% of that price difference.

Middle East conflict has driven a new surge in wholesale gas prices, with Ofgem citing continued market volatility as the reason for the intervention.