The Competition and Markets Authority has concluded an investigation into heating oil suppliers and determined that approximately 1,700 customers experienced order cancellations during a period of elevated energy prices tied to regional conflict. The affected customers had their original deliveries scrapped and were subsequently offered replacement fuel at substantially higher rates, or had no alternative supply options available.
Following the CMA’s inquiry, multiple suppliers have committed to providing compensation to impacted households. Customers who purchased replacement heating oil at elevated prices will receive payments reflecting the price differential, while those who did not secure alternative supplies will have their original orders fulfilled at the originally agreed price. The CMA stated that affected consumers may have paid between £150 and £350 above their initial contract price.
The pricing volatility stemmed from a conflict in the Middle East that triggered an energy market shock. Heating oil prices reached a peak of 123p per litre in April, representing a 92% increase from earlier levels. The CMA determined that while wholesale cost increases largely explained the price movements, some suppliers cancelled existing contracts rather than honoring them at the agreed rates.
Some suppliers have declined to offer compensation voluntarily, prompting the CMA to indicate it would pursue enforcement action through the courts if necessary. The regulator continues negotiations with remaining holdout companies to secure voluntary settlements.
The CMA has recommended that governments implement a new regulatory framework for the heating oil market. Proposed measures include a supplier register, minimum service standards governing order management, and access to independent dispute resolution services. Approximately 1.5 million UK households, predominantly in rural areas without mains gas connections, depend on heating oil for warmth and hot water.
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