UK Energy Prices May 2026: Which Fuel Offers Best Value Now?
Wood pellets hit 7.2p/kWh while oil and gas hold steady. We break down which heating fuel saves you the most this season.
The UK heating market is showing mixed signals heading into summer 2026. With mains gas locked at 6.04p/kWh under the Ofgem price cap and electricity at 24.5p/kWh, homeowners are faced with genuinely different costs depending on their heating system.
Current Price Snapshot
Mains gas remains the cheapest option for most UK households, sitting well below electricity. For a typical three-bedroom home, gas heating delivers significantly lower pence-per-kilowatt-hour costs:
- Mains gas: 6.04p/kWh (Ofgem cap)
- Wood pellets: 7.2p/kWh
- Heating oil: 96.4p/litre (ex. VAT)
- Electricity: 24.5p/kWh
Electricity remains four times more expensive than gas on a unit basis, which explains why air source heat pump economics still hinge on efficiency gains rather than raw price advantage.
Oil Market Signals Stability
Heating oil prices have steadied at 96.4p/litre following recent geopolitical developments. While international crude markets have shown volatility, UK domestic oil prices suggest relative calm ahead of the summer months. Oil customers should monitor global supply developments, but current levels aren't signalling sharp upward pressure.
The Wood Pellet Play
Wood pellets at 7.2p/kWh represent an interesting middle ground. Though slightly more expensive than gas, they appeal to off-grid properties and those seeking renewable credentials. If you're considering comparing wood heating options, summer is the ideal time to review boiler efficiency and storage capacity before next winter.
What This Means for Your Bills
A household consuming 12,000 kWh annually faces different annual costs depending on fuel choice:
- Gas: approximately £725/year (at Ofgem cap)
- Oil: varies by consumption and tank size, typically £900–£1,200 annually
- Electricity: roughly £2,940/year (why full electric heating remains uncommon)
Take Action Now
With summer here and heating demand minimal, now is the time to lock in better rates or switch providers before autumn price volatility returns.
1. Compare mains gas deals — even with the Ofgem cap, supplier variations on standing charges and fixed-rate discounts exist
2. Review heating oil prices if you're off-grid — summer purchasing can sometimes yield better rates
3. Audit your current consumption — check winter bills to understand whether your fuel choice genuinely suits your property
Looking Ahead
With solar panel uptake rising as homeowners seek to offset electricity costs, summer 2026 presents an opportunity to blend renewable generation with efficient heating choices. Even gas-heated homes can benefit from solar offsetting other electrical loads.
Energy prices remain volatile geopolitically, but today's stable rates offer a window for strategic switching. Don't wait until October when demand spikes.