Families who rely on heating oil to keep their homes warm could soon have stronger consumer rights under government plans to regulate the industry for the first time.
The UK Government confirmed on Tuesday 13 October that it will introduce reforms following an investigation into the heating oil market, where thousands of customers faced soaring prices and some had their orders cancelled earlier this year.
The announcement will be particularly significant for rural communities across the Highlands and Islands, where many households are not connected to the mains gas network and depend on heating oil throughout the winter.
Unlike gas and electricity customers, households buying heating oil currently have fewer protections when suppliers fail to deliver, prices change unexpectedly or disputes arise.
The government has accepted recommendations from the Competition and Markets Authority to introduce stronger standards across the industry, including clearer consumer rights and improved access to compensation.
The decision follows serious concerns about supplier behaviour during the energy price increases triggered by conflict in the Middle East earlier this year.
As wholesale oil prices climbed, some heating oil suppliers cancelled existing customer orders, leaving families facing the prospect of buying the same fuel again at substantially higher prices.
An investigation by the competition watchdog identified approximately 1,700 households affected by cancellations, with some customers facing additional costs of up to £350.
Suppliers have subsequently agreed to provide compensation to eligible customers following intervention by the authority.
The government also provided £53 million in emergency support for vulnerable households struggling with the sudden increase in heating costs.
However, ministers now want more permanent protections rather than relying on emergency intervention when problems arise.
The proposed reforms will establish clearer expectations for suppliers, improve arrangements for resolving complaints and provide additional safeguards for vulnerable customers.
The government will also examine industry practices requiring some households to purchase a minimum of 500 litres of heating oil at a time.
For families managing tight budgets, having to find the money for such a large delivery can be particularly difficult, even when they need considerably less fuel.
Reducing these barriers could allow customers greater flexibility when ordering oil and managing their household spending.
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.
“That’s why we will reform the sector, holding heating oil suppliers to account and giving consumers confidence that they will get a fair deal.”
The government will now work with industry representatives, regulators and consumer organisations to develop the new arrangements.
In the meantime, existing industry Codes of Conduct are expected to be strengthened to provide additional protection while the wider regulatory framework is developed.
Ministers have also highlighted financial support available to help eligible heating oil customers move towards alternative heating systems, including increased grants for heat pumps.
The latest announcement does not introduce immediate new statutory rights or set a date for the proposed regulations to take effect.
For households dependent on heating oil, particularly those in remote communities where alternatives are limited, the important test will be whether the reforms deliver fairer prices, reliable deliveries and meaningful protection when something goes wrong.
