The energy price cap could rise by more than £150 in the summer if gas prices stay elevated because of conflict in the Middle East, according to an expert forecaster.

Cornwall Insight said a typical dual-fuel household will pay £1,801 under its new forecasts for the price cap between July and September.

It represents an £160 increase from April’s price cap, following sharp increases in gas prices which have surged in recent days as Qatar’s state-run energy business, which accounts for a fifth of the liquified natural gas (LNG) trade, shut down production.

This could translate into much higher energy bills as the UK imports some LNG from Qatar, which is now the world’s second biggest supplier of the gas behind the US.

Earlier this week, Stifel analysts warned that households could pay average bills of £2,500 under the price cap, echoing the 2022 bills spike after Russia invaded Ukraine.

While Cornwall Insight’s prediction is lower, it said that the assessment period for the July price cap had only just begun, and the key issue is ‘how long gas prices stay elevated and how long this period of volatility remains.’

Dr Craig Lowrey, principal consultant at Cornwall Insight said: ‘While the rise is eye‑catching, any immediate concern should be tempered. 

‘We are still early in the assessment period for the July cap, and what happens in the energy markets over the next three months will be the key factor, rather than this spike alone.’

The energy consultancy said that while Europe and the UK ‘do not rely heavily on Qatari LNG,’ reduced supply will increase competition in the market and the UK and Europe ‘may need to raise prices to compete for these cargoes.’

It predicts that gas prices will jump from 5.74 to 6.74p/kWh for households, while electricity prices could see a smaller increase from 24.67p/kWh to 25.94/kWh.

Standing charges would increase from 57.21p per day to 59p for electricity, and to 30p per day, from 29.09p for gas.

Last week, regulator Ofgem announced April’s price cap would fall by £117 to £1,641, after the government announced plans to shift some costs away from energy bills.

‘However, this latest forecast puts the role of wholesale markets firmly back in the spotlight and illustrates how exposed UK households remain to international market movements,’ said Lowrey.

‘Events like this reinforce the case for greater home-grown renewable generation. Reducing the UK’s reliance on volatile global gas markets is the most durable way to protect households from future price shocks.’

Gas prices have started to pull back today, with European gas futures dropping more than 9 per cent to €48.30/mWh, and UK prices a similar amount to 128p per therm.

Ofgem boss Jonathan Brierley told MPs that it was too early to predict where July’s price cap might go, though. 

‘Anyone who is drawing a line from the price today and saying that’s what’s going to happen to the price cap, I don’t think that’s robust because this is moving too fast.’

But, he added: ‘Although we remain at the early stages of this conflict, if the Strait of Hormuz remains closed for a prolonged period of time it is likely this will create significant upward pressure on prices that customers will pay for their gas and electricity.

‘For example, in electricity, gas still sets the price for the majority of the time.

‘Now I know already there is a great deal of speculation about the scale and extent of those price changes. But genuinely it is too early to tell.

‘In my experience, gas traders find it extremely difficult to calibrate the sorts of risks we are facing, and therefore market projections are not a reliable guide to the future.’