The UK government has promised tighter regulation of the heating oil market following complaints from customers facing bills that have nearly doubled in a year, but has stopped short of extending the price cap that protects gas and electricity users.
Energy minister Polly Billington said the government will reform the sector, accepting recommendations from the Competition and Markets Authority after an inquiry found 1,700 households were forced to reorder at significantly higher prices or go without fuel following the start of the US-Israeli war with Iran, costing some up to £350.
The government's planned measures include developing a new regulatory regime, promoting competition, establishing clearer compensation routes for customers, and reviewing minimum order levels that currently force some customers to buy more fuel than needed. Industry practice sets minimum orders at 500 litres for some consumers, though domestic tanks typically hold 1,000 to 2,000 litres.
About 1.5 million UK households depend on heating oil, but lack the consumer protections afforded to electricity and gas customers. Some campaigners, including the charity National Energy Action, have called for heating oil to benefit from the same price cap as standard variable gas and electricity tariffs in England, Scotland and Wales. The government has not signalled it will pursue this approach, nor specified when stricter rules will take effect.
Tim Buckman, chief executive of price comparison site Boiler Juice, told the BBC that regulation alone will not reduce prices for customers. He called for VAT cuts on heating oil instead. Nick, a 28-year-old heating oil customer from West Suffolk, said prices had risen to 111p per litre, adding that heating his home "is now no longer another household bill, but almost an investment."
The government previously distributed £53m in support for low-income heating oil users through local authorities. Northern Ireland, where 60% of households rely on heating oil, operates under separate regulation. The UK government said it would engage with the Northern Ireland Executive as they consider the recommendations.