UK Government Moves to Regulate Heating Oil Market

The UK Government is moving toward new protections for heating oil customers after severe price increases exposed rural households to market shocks. Ministers will work with industry to develop regulation following recommendations from the Competition and Markets Authority, according to reports cited by End Fuel Poverty Coalition.

The Competition and Markets Authority found that 1,700 households were owed compensation after suppliers cancelled orders during a period of record heating oil prices, forcing customers to reorder at higher costs. Ministers said they will strengthen Codes of Conduct and review minimum order volumes of 500 litres.

Heating oil remains outside the Ofgem price cap, leaving households vulnerable to global price changes. According to End Fuel Poverty Coalition, prices rose from 60p to more than 120p per litre in early March before falling to around 70p by early July and rising above £1 per litre in September amid renewed geopolitical uncertainty.

The End Fuel Poverty Coalition spokesperson said:

"Bringing heating oil under proper regulation is a step in the right direction for rural households who have been left to fend for themselves every time global oil prices spike. Having orders cancelled and being forced to pay more in the middle of a crisis should never have been allowed to happen and Ministers must now act quickly. There needs to be a clear timetable so households are protected as soon as possible and urgent work done to implement a heating oil price cap.

The heat pump grants are a real opportunity for heating oil households to get off the fossil fuel price rollercoaster, so it is beyond belief that the Chancellor is rumoured to be axing the programme to fund the Defence Investment Plan. Given that getting households off heating oil will improve energy security, such a move does not make sense." said an End Fuel Poverty Coalition spokesperson.

The coalition has called for an Emergency Heat Tariff this winter that would cap heating oil prices at £1 per litre. The group also highlighted that households using heating oil can currently receive a £9,000 discount on a heat pump through the Boiler Upgrade Scheme.

The Boiler Upgrade Scheme faces possible cuts, according to the End Fuel Poverty Coalition, with the reported changes linked to efforts to fund the Defence Investment Plan. Ministers have not yet announced a final timetable for the heating oil regulatory regime.