Key facts
- UK heating oil customers affected by cancelled orders during a price surge will receive up to £350 compensation.
- Around 1,700 households were impacted by cancelled orders and subsequent price hikes.
- The Competition and Markets Authority (CMA) is pursuing compensation for affected customers and legal action against non-compliant suppliers.
- Wholesale oil prices surged due to the Middle East conflict, leading to a 92% peak increase in UK retail heating oil prices.
- The CMA recommended new regulations to better protect heating oil consumers.
Heating oil customers in the UK who had their orders cancelled and prices raised during a period of market volatility linked to the Middle East conflict will receive compensation of up to £350. The Competition and Markets Authority (CMA) stated that approximately 1,700 households were affected, some being forced to re-order at significantly higher prices or go without fuel.
Wholesale oil prices jumped from around $70 a barrel to nearly $120 a barrel between February and March due to the conflict, causing UK heating oil prices to rise by as much as 92% at their peak. While the CMA found that these price increases largely reflected rising wholesale costs and suppliers did not profit materially, it concluded that heating oil customers lack adequate protection compared to those connected to the energy grid.
Following engagement with the CMA, several suppliers have agreed to compensate affected customers. Those who paid more for replacement oil will receive a payment covering the difference, while customers who did not secure replacement fuel will have their original orders honored at the agreed price. The CMA is preparing to take court-based enforcement action against firms that have refused to compensate customers voluntarily.
Chancellor Rachel Reeves expressed concern over the lack of consumer protection in the heating oil market and stated the government would seriously consider the CMA's recommendations. The watchdog has recommended new regulations for the sector, including clearer price quoting, improved handling of cancellations, and better support for vulnerable consumers. Approximately 1.5 million UK households rely on heating oil, with most located in Northern Ireland.