Government Tightens Heating Oil Rules Across UK Market

The UK government is moving to strengthen rules for the heating oil market after soaring costs left about 1.5 million households facing higher winter bills, with ministers targeting consumer protection, competition and compensation routes.

The reforms follow a Competition and Markets Authority review that found 1,700 households were forced to reorder fuel at higher prices or go without supplies after market disruption, with some costs reaching £350, according to the CMA.

Ministers said they will work with the industry to create a new regulatory system for heating oil customers. The government said minimum order requirements, including 500-litre thresholds used for some customers, will be reviewed.

"Develop a regulatory regime for the heating oil market, protecting consumers and promoting competition" was the government description of its planned approach.

Energy minister Polly Billington said the reforms are intended to address concerns among customers who lacked protections available to gas and electricity users.

"Thousands of heating oil customers felt they had nowhere to turn when they paid the price of rising oil and gas costs earlier this year," said Polly Billington, Energy minister.

Billington said the government would not accept gaps in consumer safeguards as heating oil users continue to face volatile prices.

"We won't accept that. Energy is an essential good and people should not have to think twice about whether they're protected in the market. That's why we will reform the sector," said Polly Billington, Energy minister.

Heating oil prices rose sharply after conflict in the Middle East disrupted energy markets. Boiler Juice data cited by the BBC showed prices reached 111p per litre after previously rising from around 60p per litre to 134p per litre.

Customers in rural areas described the impact of higher costs. Nick, a heating oil user from West Suffolk, said households outside the main gas network had received limited policy attention.

"Off-grid households remain a major policy blind spot for the government," said Nick, a heating oil customer from West Suffolk.

Nick said he rents a three-bedroom home with his partner and had seen heating oil quotes rise to 111p per litre.

"Any protection from UK government for domestic heating oil users will be very welcome, providing this is for all domestic heating oil users," said Nick, a heating oil customer from West Suffolk.

Another customer described the financial pressure of refilling a household tank during winter preparation.

"Heating my home is now no longer another household bill, but almost an investment," said Nick, a heating oil customer from West Suffolk.

Industry representatives called for measures beyond regulation, including changes to costs affecting consumers. Boiler Juice chief executive Tim Buckman said regulation alone would not immediately lower prices.

"Just putting regulation in place is not going to reduce the price for customers. What we would like to see is the VAT off heating oil or targeting that specifically," said Tim Buckman, chief executive of Boiler Juice.

The CMA said stronger oversight was needed because rural and vulnerable communities were exposed to price changes.

"Stronger safeguards are needed - including regulatory oversight and better support for vulnerable consumers as well as communities living in areas of the UK that are particularly exposed to higher and more volatile prices," said Sarah Cardell, Chief Executive of the Competition and Markets Authority.

Rural groups also called for targeted assistance for households dependent on heating oil and LPG.

"Without specific targeted support for heating oil and LPG users, thousands of rural people risk becoming the forgotten victims of the energy crisis," said Corinne Pluchino, Chief Executive of Action in Rural Communities England.

Heating oil industry representatives promoted winter preparation measures, including checking tank levels, maintaining supplies and servicing heating systems.

"The events we saw earlier this year demonstrated how quickly international developments can affect wholesale energy markets. The CMA's findings have also helped clarify the factors influencing heating oil prices," said Ken Mackness, Chief Executive of UKIFDA.

UKIFDA said its winter campaign focuses on helping customers prepare before colder conditions increase demand.

"As we move into winter, our focus is on helping households plan ahead. By monitoring tank levels, maintaining a sensible tank level and ordering in good time, customers can reduce the risk of disruption during the colder months," said Ken Mackness, Chief Executive of UKIFDA.