How can I merge duplicate photos to gain storage

Use the Duplicates album as described here: Find and delete duplicate photos and videos on iPhone - Apple Support

But this is only possible on iOS 16. You will have to upgrade your iPhone to the current system version to be able to use the Duplicates album. And it may take several days, even weeks, for Photos to scan for duplicates after the system upgrade, the Duplicates album will appear once the photos have been scanned.

The merging feature is new to iOS 16. If you want to use it you will have to update to iOS 16 and then go into photos scroll down and see if there is a merge icon. But if you don't want to update you an research some merging apps.

Here are the links to updating and merging photos:

Find and delete duplicate photos and videos on iPhoneAppleOfficial Apple Support › guide › iphone › ios

How to update to iOS 16 or iPadOS 16 - Official Apple SupportAppleOfficial Apple Support › iOS