Energy Update — 26 February 2026

Market Update

Volatility is currently driven by market sentiment around potential US military action against Iran. Last week, Iran temporarily blocked the Strait of Hormuz, through which 25% of the world's oil & gas flows, causing a market spike, most clearly in gas. Prices fell back quickly as this was short-lived. A longer blockage would inevitably mean a steep increase in energy costs.

Europe and the UK’s gas reserves remain around 30%. Even the continuing risk of a “Beast from the East” next month, due to the ongoing Sudden Stratospheric Warming event over the Arctic, does not pose a major risk to reserves this close to spring.

Business Energy Costs

The recent trend of falling commodity costs continues to support falling contract rates.

		Commodity Cost	Av Unit Rate	Av Standing/Ch
Electricity	02/02/2026	7.6p	24.2p	£1.62
	13/02/2026	7.6p	23p	£3.86
	27/02/2026	6.9p	23.1p	£1.52
Gas	02/02/2026	2.6p	5.7p	£1.31
	13/02/2026	2.6p	6p	£1.15
	27/02/2026	2.5p	5.5p	£1.98

However, increasing non-commodity costs scheduled for 1St April will raise electricity costs. This includes those already in a “fixed” contract, as the supplier will “pass through” these added costs. As well as those looking to agree a new electricity contract in the coming months. The increase is based on a 2.5ppkW added to costs, transmission (TNUoS) being the biggest factor, as the UK “rewires” the grid. The impact is estimated by Ofgem to be 7 – 11% on business energy costs. In terms of hospitality, the Network System Operator (NESO) forecasts:-

1. Small Pub/Retail £1,150+ for sites using <41,000 kWh. The daily rate has risen by approximately £3.15 per day.
2. Mid-Size Pub/Restaurant - £1,550+ for sites using 41,000 – 100,000 kWh. The daily rate increase averages £4.25 per day.
3. Large Managed House - £2,800 to £3,400+. These sites face a daily standing charge increase of £7.60 to £9.30 per day.

The impact on each business will also be influenced by its existing supplier. Some of whom will have already included some or all these costs. Anyone looking to renew their electricity in the coming months is recommended to review their options now. As well as today’s price, it’s important to understand the extent to which your rates are fixed or variable. Given that costs will continue to rise, it’s important to know which contracts expressly allow suppliers to pass on a range of non-commodity costs.

Nationwide Energy offers the support you need to make your next energy contract transition smoother, deal with supplier issues, or review your energy consumption.

Graph produced by Cornwall Insight in conjunction with Drax Energy Solutions, 26/02/2026.