UK government promises tighter regulation of heating oil sector as prices near double

Mixed · 2The UK government has promised better regulation of the heating oil sector, saying it will tighten rules, promote competition and give customers clearer compensation routes if things go wrong. 1 2 Mixed · 2Ministers said they would work with industry to "develop a regulatory regime for the heating oil market, protecting consumers and promoting competition", and that they will accept the Competition and Markets Authority's (CMA) recommendation to strengthen regulation. 1 2 Mixed · 2Energy minister Polly Billington said 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, adding: "That's why we will reform the sector." 1 2

Mixed · 2About 1.5 million households depend on heating oil, and prices have nearly doubled in the past year since the start of the US-Israeli war with Iran. These households lack the consumer protections that gas and electricity customers have. 1 2 Mixed · 2The CMA's inquiry found that 1,700 households were forced to re-order at significantly higher prices or go without fuel after the war broke out, costing them up to £350. Customers whose orders were cancelled and repriced were told they were entitled to compensation. 1 2 Mixed · 2Meanwhile, oil users have been offered heat pump discounts and a code of practice is in place. The industry practice of minimum orders of 500 litres for some consumers will be reviewed, because it left some people paying for more oil than they needed; domestic tanks typically hold 1,000 to 2,000 litres. In March the government announced a £53m support package for low-income oil-heating families, distributed by local authorities that set their own eligibility criteria. 1 2

Mixed · 2There is no sign that the government will extend the price cap on standard variable gas and electricity tariffs to heating oil, nor has a date been set for the new rules. Some campaigners, including the charity National Energy Action, have called for the cap to be extended. 1 2 Mixed · 2Tim Buckman, chief executive of price comparison site Boiler Juice, said he wants stronger protections but that regulation alone will not reduce prices, and called for VAT to be removed from heating oil. Nick, a 28-year-old customer from West Suffolk, said off-grid households remain a "major policy blind spot" and that he had been quoted 111p per litre, more than double a year earlier. 1 2 Mixed · 2Ofgem is likely to regulate heating oil in England, Scotland and Wales. In Northern Ireland, where 60% of households use heating oil, regulation is separate, and the UK government said it would engage with the Northern Ireland Executive as it considers the recommendations in parallel. 1 2

Right · 1The industry body UKIFDA has launched a winter campaign urging customers to order early, keep tanks above 500 litres where possible and service boilers before the cold months. 2