Ministers promise tougher regulation of a market accused of leaving customers exposed to soaring prices, but stop short of extending the energy price cap to off-grid homes.
Britain’s 1.5m heating oil households face a stark prospect as winter approaches; they are paying almost twice as much to heat their homes as they did a year ago, with no guarantee the government’s promised reforms will arrive in time to protect them.
Ministers have pledged to tighten regulation of the heating oil market following a Competition and Markets Authority investigation into soaring prices and alleged consumer mistreatment after the outbreak of the US-Israeli war with Iran. But the announcement offers little immediate relief to households already struggling with rising bills.
Unlike customers on standard gas and electricity tariffs, households relying on heating oil have no equivalent government-backed price cap. The government has also not set a timetable for introducing its proposed regulatory regime, leaving campaigners questioning how much protection will be in place before temperatures fall.
The CMA found that 1,700 households were forced either to reorder fuel at significantly inflated prices or to go without it after the conflict began. The additional cost reached up to £350 per household. Customers whose orders were cancelled and subsequently repriced were told they had a right to compensation.
Energy minister Polly Billington acknowledged that customers had felt abandoned.
“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,” she said. “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.”
The proposed reforms will examine minimum order requirements, including practices that have required customers to buy at least 500 litres, potentially forcing households to purchase more fuel than they need. Ministers also intend to strengthen competition and improve compensation arrangements.
Yet the central problem remains the price itself.
Nick, a 28-year-old renter in West Suffolk, told the BBC he had been quoted 111p per litre — more than double the price a year earlier. Heating his three-bedroom home with his partner had become “no longer another household bill, but almost an investment”, he said.
He called for tax reductions and an extension of the energy price cap to heating oil. The charity National Energy Action has also pressed to extend the cap to off-grid households.
Tim Buckman, chief executive of price comparison website Boiler Juice, welcomed stronger consumer protections but warned that regulation alone would not bring down prices.
“Just putting regulation in place is not going to reduce the price for customers,” he said, calling for VAT relief on heating oil or other targeted tax measures.
The government announced a £53mn support package for low-income heating oil households in March, with local authorities responsible for distributing the money under their own eligibility criteria. Ministers have also made heat pump discounts available.
The challenge is particularly acute in Northern Ireland, where about 60 per cent of households rely on heating oil. While Ofgem is expected to assume oversight in England, Wales and Scotland, Northern Ireland’s separate regulatory arrangements will require engagement with the devolved executive.
Meanwhile, the industry body UKIFDA is urging households to order early, service boilers and maintain adequate tank levels.
For millions of households, however, the immediate question is not how to prepare their tanks for winter, but whether they can afford to fill them. The government has promised to close a longstanding gap in consumer protection. Until the reforms arrive — and the cost of fuel comes under control — that promise offers little certainty against the cold.
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