Thousands of UK households reliant on heating oil are due to receive compensation following significant price increases and cancelled contracts experienced during spring 2026. An investigation by the Competition and Markets Authority (CMA) revealed that approximately 1,700 households were impacted by market volatility, which saw some customers paying between £100 and £350 more than anticipated for their heating oil deliveries.
The price surges were largely attributed to escalating conflict in the Middle East earlier this year, which disrupted supply chains and caused heating oil prices to spike by up to 92% in some instances. The average price of a litre of kerosene, a common heating oil, reached £1.05 in the three months leading up to June 2026, marking a substantial 34p per litre increase compared to the preceding three months. The CMA's findings highlighted that while customers often received refunds for their initial cancelled orders, they were subsequently forced to purchase oil at significantly higher rates or face going without fuel.
A number of heating oil suppliers have now agreed to compensate affected customers. Eligible households will either receive a payment covering the difference between their cancelled order and the replacement order, or their original agreed price will be honoured if they did not purchase replacement oil. The CMA confirmed it is pressing other firms that have not yet agreed to compensation, with potential enforcement action being prepared for non-compliance. Further details on how the compensation scheme will operate are expected once it is fully established.
Beyond immediate compensation, the CMA has also called for new regulations to better protect heating oil customers, who are currently less safeguarded than those connected to the gas grid. Following a market study, the CMA recommended that the UK government and Northern Ireland Executive introduce measures such as minimum standards for price quoting and cancellation management, access to independent dispute resolution, clear payment plans, and a register for vulnerable households. These recommendations aim to mitigate the impact of future price volatility caused by factors like severe weather or geopolitical events.
For households struggling with energy costs, government support schemes such as Universal Credit and the Warm Home Discount may offer some relief, though these primarily target those on the gas and electricity grids. Those off the gas grid, particularly in remote areas like parts of Scotland where heating oil prices were found to be highest, often face fewer supplier choices and increased delivery costs. Consumers are advised to compare prices from multiple suppliers and consider collective buying schemes where available. Organisations like Citizens Advice and MoneySavingExpert offer guidance on managing energy bills and finding the best deals.