The UK's heating oil crisis has left thousands of households facing inflated bills and disrupted energy supplies. According to data from the Competition and Markets Authority (CMA), approximately 1,700 customers were affected by supplier cancellations and price hikes that saw prices soar by 92% in April to a peak of 123p per litre.
The CMA's investigation found that some suppliers had cancelled existing orders, only to offer new ones at significantly higher prices. While original orders were refunded, many households were forced to pay between £150 and £350 more for replacement fuel or risk going without. The watchdog estimates that the cumulative cost of these price increases will have reached tens of millions of pounds.
Following contact from the CMA, several suppliers have agreed to compensate those impacted, with affected customers set to receive payments covering the difference between what they paid and their original order prices. Those who did not purchase replacement oil will see their original orders honoured at the price initially agreed. However, some suppliers remain resistant to compensation, prompting the regulator to threaten enforcement action through the courts.
Around 1.5 million households across the UK rely on heating oil for warmth, cooking, and hot water, with bills often reaching £500 or more at a time due to buying in bulk. The CMA's market study concluded that price increases were driven by rising wholesale costs, rather than supplier profiteering. However, it highlighted that consumers in this market are less protected than those connected to the national grid.
In response to these vulnerabilities, the CMA has recommended a new regulatory framework for heating oil suppliers, including a register of suppliers and minimum standards for order cancellations. An independent dispute resolution service would also be established for customers. Chancellor Rachel Reeves has acknowledged the need for action, stating that while the market appears competitive, the lack of protection for these households is a serious concern.