Gas Up 8% From October: What It Does to Log Costs

The burning season starts with a price change that pulls gas and electricity in opposite directions for the first time in a while. Ofgem confirmed the winter cap this week, and the two fuels a stove competes against are no longer moving together. Here is what actually changed and what it does not tell you.

The October cap is £1,723, and the rise is all gas

On 26 August Ofgem set the energy price cap for 1 October to 31 December 2026 at £1,723 a year for a typical household paying by direct debit for gas and electricity. That is up £60 a year, or £5 a month, from £1,663, a rise of 4 per cent.

The average hides the important part. Gas bills are rising 8 per cent. Electricity bills are staying broadly flat. A household with no gas supply at all sees a rise of under 1 per cent. Around 35 per cent of households, roughly 11 million, are on fixed tariffs and see nothing until their deal ends. Ofgem attributes the increase to high international gas prices and notes that bills remain about 52 per cent below the early 2022 peak of around £2,500.

“High international gas prices are continuing to drive energy costs in the UK,” said Neil Kenward, Ofgem’s Director General for Markets.

For anyone heating with a stove, the honest version of what this means is narrower than the headlines suggest. An 8 per cent rise in gas widens the gap between a load of logs and an hour of central heating, but it does not change the two things that decide whether a stove saves you money: whether you can heat the room you actually sit in rather than the whole house, and what you pay per cubic metre for fuel that is genuinely under 20 per cent moisture. A stove burning wet wood at autumn prices is not cheaper than a modern boiler, whatever gas does. If you have not checked your fuel, what moisture should firewood be is the number that matters, and how to season firewood under 20 per cent covers getting there. The announcement is at Ofgem.

VAT comes off electricity for six months, then goes back on

The reason electricity stays flat while gas climbs is a tax change, not a market one. The government is removing VAT from domestic electricity, cutting it from 5 per cent to zero from 1 October 2026 until 31 March 2027. Gas keeps its 5 per cent. Ofgem said it welcomed the intervention.

Two things follow from that, and both are about the date it ends.

First, if you have been weighing an electric alternative, an infrared panel or a heat pump or simply using the electric heater in one room rather than lighting the stove, the comparison you run this winter is flattered by a tax break that expires on 31 March. Run the sums twice: once at the cap rate and once with 5 per cent added back, because the second number is the one that applies from spring onwards.

Second, it makes the case for buying fuel now rather than in December stronger, not weaker. Kiln-dried log prices track demand, and demand peaks exactly when everyone else notices their gas bill has gone up. Buying in the shoulder season is the one reliable saving in wood heat, and it is worth more than any tariff decision you will make. Our firewood buying guide covers what to ask a supplier and how to check volume, and kiln dried logs versus briquettes compares the two on cost per useful kilowatt hour rather than per bag. The VAT change is set out in the government announcement at GOV.UK.