The government has announced it will accept a recommendation from the Competition and Markets Authority (CMA) to strengthen regulation of the heating oil market, the BBC reports. This move aims to formalise standards for suppliers, shield vulnerable households, and provide clearer routes to compensation.
Key points
- Regulation — The CMA recommended stronger rules for heating oil suppliers; the government will now develop a regulatory regime.
- Compensation — 1,700 households were owed compensation after orders were cancelled and they had to re-order at higher prices.
- Support — £53 million in immediate support was provided to vulnerable customers during the crisis.
- Heat pumps — The £9,000 heat pump grant for heating oil users has driven a surge in applications.
The decision follows a period of turmoil in the market earlier this year, when rising oil and gas prices, linked to conflict in the Middle East, sent heating oil costs to record highs. Some suppliers cancelled orders, forcing customers to re-order at higher prices.
Minister for Energy Consumers Polly Billington said:
Thousands of heating oil customers felt they had nowhere to turn when they paid the price of rising oil and gas costs earlier this year. We won’t accept that. Energy is an essential good and people should not have to think twice about whether they’re protected in the market.
As part of the reforms, the government will review industry practices such as minimum order volumes of 500 litres, which can require customers to buy more oil than they need. This is intended to give households more flexibility with the cost of living.
Additionally, the government has increased the discount on heat pumps to £9,000 for households using heating oil. Applications for heat pumps through the Boiler Upgrade Scheme have risen sharply, with July’s figures showing an 81% jump compared to the previous year. In August, 1,042 voucher redemptions were for the £9,000 heating oil grant, representing 32% of the total for the month.
What it means in practice
For households relying on heating oil, the planned reforms should lead to clearer protection and fairer treatment from suppliers. The review of minimum order volumes may reduce pressure to buy more fuel than needed, and the increased heat pump grant offers a way to switch to cleaner energy. However, the changes will take time to implement, so immediate relief may be limited. It’s worth staying informed about your rights and considering whether a heat pump grant could work for you.
- Check your supplier — Make sure you know your rights and what to do if an order is cancelled.
- Consider a heat pump — The £9,000 grant for heating oil users could make switching more affordable.
- Watch for updates — The regulatory regime and code of conduct changes will develop over the coming months.
