The Competition and Markets Authority has concluded an investigation into heating oil suppliers following complaints that customers’ existing orders were cancelled and replaced with significantly higher-priced alternatives. The regulator’s report, released on Wednesday, identified roughly 1,700 affected customers who had their deliveries scrapped during an energy market disruption.
The pricing shock was triggered by conflict in the Middle East, which caused heating oil prices to spike sharply. At its peak in April, prices reached 123p a litre, representing a 92% increase. During this volatile period, some consumers who needed to secure replacement fuel faced increases of between £150 and £350 compared to their original contract prices.
Following the CMA’s investigation, multiple suppliers have agreed to compensate affected customers. Those who purchased replacement oil at elevated prices will receive payments covering the difference, while customers who went without fuel can have their original orders fulfilled at the originally agreed rate. However, the regulator indicated that some suppliers have not yet committed to compensation and warned of potential enforcement action.
Approximately 1.5 million UK households, predominantly in rural areas without access to mains gas networks, depend on heating oil for heating and hot water. The CMA’s market study determined that price increases largely reflected genuine wholesale cost rises rather than supplier profiteering. Nevertheless, the regulator noted that heating oil customers lack protections comparable to those connected to gas and electricity grids.
In response, the CMA has recommended that the UK and devolved governments establish a new regulatory framework for heating oil suppliers. This would include a mandatory supplier register, minimum standards for order management, and access to independent dispute resolution services. The chancellor indicated the government would consider implementing stronger protections for these households.
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