The UK Competition and Markets Authority has concluded an investigation into heating oil suppliers and found that approximately 1,700 customers had their existing deliveries cancelled when prices surged due to conflict in the Middle East. Following the watchdog’s inquiry, several suppliers have agreed to provide compensation to affected customers.
According to the CMA’s report released on Wednesday, customers whose orders were cancelled faced difficult choices: pay significantly higher prices for replacement deliveries or forgo heating oil entirely. Those who paid more will receive compensation equal to the difference, while those who did not purchase replacement oil will have their original orders fulfilled at the previously agreed price. Customers affected may receive between £150 and £350 in compensation. At the height of the crisis in April, heating oil prices climbed 92% to 123p per litre, creating the conditions under which suppliers cancelled contracts.
The CMA stated that while some suppliers have voluntarily agreed to compensate customers, others have not yet done so. The watchdog indicated it is continuing negotiations with holdout suppliers and is prepared to pursue court-based enforcement action against companies that refuse to provide voluntary compensation. Sarah Cardell, the CMA’s chief executive, stated that affected customers had been “left in limbo” and expressed concern that protections for heating oil users remain inadequate compared to those available to customers on mains gas and electricity networks.
Approximately 1.5 million UK households rely on heating oil for heating and hot water, primarily in rural areas without access to mains gas infrastructure. The CMA recommended that the UK government introduce a new regulatory framework for heating oil suppliers, which would include a supplier register and minimum standards governing order cancellations and dispute resolution. The CMA’s analysis found that price increases largely reflected rising wholesale costs rather than supplier profiteering during the crisis.
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