The Competition and Markets Authority has concluded its investigation into heating oil suppliers and determined that roughly 1,700 customers experienced contract cancellations during a period of significant price volatility. The watchdog found that suppliers scrapped existing orders and required customers to either accept substantially higher prices for replacement deliveries or forgo fuel supplies entirely.
The pricing pressure emerged following the Middle East conflict, which triggered energy market disruptions. Heating oil prices peaked in April at 123p per litre, representing a 92% increase. Affected customers reportedly paid between £150 and £350 more than their original contracted amounts, or were unable to secure replacement supplies at reasonable costs.
Following the CMA’s intervention, multiple suppliers have agreed to provide compensation to impacted households. Customers who paid premium prices for replacement oil will receive refunds covering the difference, while those who did not purchase alternative fuel will have their original orders fulfilled at the previously agreed rate. However, some suppliers have not yet committed to compensation, prompting the CMA to prepare enforcement action.
The investigation also examined broader market conditions and found that wholesale cost increases largely accounted for retail price movements, indicating suppliers did not materially profit from the crisis. Nevertheless, the CMA noted that heating oil customers lack protections comparable to those connected to mains gas and electricity networks. Approximately 1.5 million UK households, predominantly in rural areas without gas infrastructure access, depend on heating oil for heating, cooking and hot water provision.
The CMA has recommended that governments establish a new regulatory framework for the heating oil sector, including a supplier register, minimum operational standards for order management, and mandatory access to independent dispute resolution services. The recommendation reflects broader concerns about consumer protection gaps in this market segment.
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