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Start your planHeating oil prices spike amid Middle East conflict: here's what you can do
Support for vulnerable heating oil customers announced by government
Oil-heated households are seeing sudden price increases across the UK and Ireland amid the ongoing conflict in the Middle East.
Extra support for vulnerable households who use oil heating was announced by Prime Minister Keir Starmer earlier this week.
See details of what has been announced so far for households in England, Scotland, Wales and Northern Ireland below.
We've seen reports of customers having heating oil orders cancelled, being quoted far higher prices than before the conflict began, and struggling to place an order from their usual supplier or having to wait longer than usual.
Two main issues with heating oil prices have been identified by the Competition and Markets Authority (CMA):
- Existing orders for heating oil are being cancelled, and customers offered new quotes at significantly higher prices
- Prices for automated deliveries are increasing.
Heating oil powers around 1.5 million UK homes, mainly in rural areas. It's the main source of fuel for heating in more than 60% of households in Northern Ireland.
It's not just oil-heated homes affected by price changes. Find out how the Middle East crisis might impact your energy bills
Tips for heating oil customers
If your tank is running low, the UK & Ireland Fuel Distributors Association (UKIFDA) advises to order as normal. Otherwise:
- Talk to your local distributors and check online platforms
- If you can delay purchasing, consider waiting
- Ask about smaller deliveries, but be aware that more frequent deliveries may increase your overall cost
Read more: Getting the best heating oil prices.
What help is available for heating oil customers?
Additional support for those who heat their homes with oil was announced by Prime Minister Keir Starmer in a press conference on 16 March.
He said that this support, worth £53 million, will be focused on heating oil customers in vulnerable situations.
England will receive £27m, Northern Ireland £17m, Scotland £4.6m and Wales £3.8m.
In Northern Ireland, Scotland and Wales, devolved governments will be allocated the money to support households.
England
In England, local authorities will distribute the support via the new Crisis and Resilience Fund which exists from 1 April.
Low-income households and those in vulnerable situations should qualify, though the exact eligibility criteria will be set by local authorities.
Local authorities will also determine:
- the type of support you can get, including how much
- when you'll be able to get it (though a Treasury spokesperson told us that funding should be made available to those in acute need as soon as posisble)
- how you'll receive support.
From 1 April your local authority should have a dedciated 'Crisis and Resilience Fund' website through which support is distributed. Until 31 March look for your local authority's Household Support Fund.
Northern Ireland
Finance Minister John O'Dowd said that those on the lowest incomes would be the focus for financial support for heating oil costs in Northern Ireland.
He explained that, otherwise, proposed help 'would amount to roughly £35 per household'.
We'll add more details of who will be eligible and how support will be rolled out as they're announced.
Scotland
- The Scottish Emergency Oil Heating Scheme will launch on 1 April, run by Advice Direct Scotland.
- Details of who is eligible and how to apply will be announced in the 'coming days'.
- The Scottish government will add £5.4million extra to its fund to support low income oil-heated households.
Wales
- Welsh households in fuel poverty can get up to £750 towards off-grid fuel costs.
- This is through the existing Discretionary Assistance Fund (DAF), which the Welsh government announced will provide temporary extra support (up from £500).
- Anyone with an address in Wales and over the age of 16, experiencing unexpected financial crisis can apply.
- You can apply more than once, as long as your requests are more than three months apart.
Cabinet Secretary for Social Justice Jane Hutt said that the Welsh government is 'considering how best to deploy' the money allocated by the UK government.
Heating oil companies under investigation
The Competition and Markets Authority (CMA) has found that heating oil 'suppliers are cancelling orders and jacking up prices', the Prime Minister said.
'That kind of conduct is completely unacceptable', he added. 'If companies have broken the law there will be legal action.'
The CMA is writing to heating oil firms to find out more about their practices at this time.
It could take enforcement action if it finds that companies have broken consumer protection rules.
The government said it plans to introduce new consumer protections for heating oil customers and is considering:
- a new Code of Practice giving more flexibility on the size of oil deliveries and improving price transparency. This would be agreed with industry
- a Priority Customers Register so that those who are vulnerable can get priorty support when there's disruption
- more repayment options for customers facing hardship
- creating a new Ombudsman or appointing a regulator for heating oil.
The Northern Ireland Executive will be involved to make sure that new measures work for households in Northern Ireland too.
The CMA is also investigating how far recent heating oil pricing trends reflect underlying wholesale cost movements.
Why are heating oil prices rising?
Heating oil is kerosene-based, like jet fuel. The wholesale price of jet fuel has more than doubled since the recent Middle East conflict began, according to the UKIFDA, with prices at a three-and-a-half-year peak.
Heating oil is mostly supplied by refineries in the Middle East. The Strait of Hormuz, through which around 20% of the world's oil is transported, is blocked as part of Iran's response to the ongoing conflict.
Volatile prices make it difficult for distributors to predict the cost of fuel they purchase.
Some are therefore scheduling orders from households in advance, but confirming prices closer to the delivery date. Not knowing what you'll pay makes it tricky to budget.
Unlike gas and electricity, heating oil prices aren't covered by the energy price cap.
