Issued by: Competition and Markets Authority

CMA recommends UK and devolved governments strengthen protections for the 1.5 million households reliant on heating oil.

• 1.5 million households in the UK depend on heating oil but do not have the same consumer protections as electricity and gas customers

• CMA recommends a new proportionate regulatory regime for example covering how prices are quoted, cancellations are handled and better support for vulnerable consumers

• CMA is also taking action to protect around 1,700 households whose orders may have been cancelled in breach of contract, potentially costing them up to £350

The Competition and Markets Authority (CMA) launched a market study [https://tinyurl.com/38xnwa9y] into the heating oil sector after conflict in the Middle East caused significant disruption and average retail prices were, at their peak, 92% higher.

Heating oil is essential for many households, particularly those in rural and off-grid communities. Unlike mains gas and electricity, heating oil is typically bought in large volumes, meaning households can face bills of around £500 or more at a time.

What the CMA found

The price increases after the Middle East conflict largely reflected rising wholesale costs.

The CMA found that although the home heating oil market is generally competitive and suppliers have not profited materially from the crisis, consumers are not as well protected as those connected to the grid.

Most households have a choice of suppliers and access to information to help them get a good deal.

Prices tend to be lowest in Northern Ireland, where over 60% of households rely on heating oil. These households are closer together, which reduces delivery costs and helps keep prices down.

However, people in many remote areas – including parts of Scotland – generally have less choice of suppliers and face higher prices due to the higher costs of serving these areas. Prices have also increased more in some of these areas following the Middle East conflict as supply costs have also increased further.

There are clear gaps in the protections available to heating oil customers compared with those connected to gas and electricity networks – such as consistent standards of support for vulnerable customers and access to alternative dispute resolution if a customer cannot resolve their issue with a supplier.

The lack of protections becomes especially problematic during periods of volatility – for example, where demand increases as a result of more severe weather conditions or where supply is disrupted by geopolitical developments – both of which may become more common in future. At these times, heating oil households may face substantially higher prices, uncertainty over what they will pay or whether a delivery will arrive, and fewer options for urgent deliveries. At such times, people need confidence that they will be treated fairly.

Recommendations

To help better protect people and improve outcomes, especially during periods of volatility, the CMA has made recommendations to the UK and devolved governments. This includes for the UK government and Northern Ireland Executive to introduce a new, proportionate regulatory regime for heating oil suppliers. This should:

• require suppliers to register and meet minimum standards – which include how prices are quoted, cancellations are managed and giving households access to independent dispute resolution

• require suppliers to clearly signpost available payment plans and minimum purchase volumes

• create a register for vulnerable households to make it easier to protect them

The CMA is also recommending a review of rules and regulations around minimum order volumes to allow people to buy smaller amounts of heating oil.

Further options for governments to consider include developing a new price checker for consumers in Scotland, based on the heating oil price tool implemented by the Consumer Council for Northern Ireland [https://tinyurl.com/3r62f2uc], and consideration of whether to prioritise for transition to alternative energy sources those communities that are more exposed to higher heating oil prices.

Compensation for cancelled orders

Alongside its market study [https://tinyurl.com/38xnwa9y], the CMA has been looking into concerns that a small proportion of heating oil suppliers may have breached their contracts when they cancelled customer orders.

CMA analysis shows that around 1,700 customers were affected by possible breaches of contract. Whilst those people received refunds for their original order, many had to re-order at significantly higher prices or go without fuel.

As a result, some people may have had to pay between £150-350 more for their heating oil. This shows why heating oil customers need improved regulatory protections such as alternative dispute resolution to help them enforce their rights.

Following CMA engagement, a number of suppliers have agreed to compensate affected consumers. Those who paid more to replace their cancelled order will receive a payment covering the difference, while those who did not buy replacement oil will have their original orders honoured at the agreed price.

It is disappointing that not all affected suppliers have agreed to such compensation. The CMA is continuing to engage with those suppliers and is preparing to take court-based enforcement action against firms that fail to compensate customers voluntarily.

Sarah Cardell, Chief Executive of the CMA, said:

"Heating our homes and having reliable hot water are basic needs. While the home heating oil market is generally competitive, that is not enough to ensure good outcomes for all.

"Stronger safeguards are needed – including regulatory oversight and better support for vulnerable consumers as well as communities living in areas of the UK that are particularly exposed to higher and more volatile prices. These practical changes will help ensure people receive fair treatment, clear information and appropriate support when disruptions occur.

"We have also found that around 1,700 customers were left in limbo by some suppliers after orders were cancelled as the crisis was unfolding. While it’s encouraging that some suppliers have agreed to compensate customers, a number of firms still have not. We’ll be pressing them to do so and are preparing to take enforcement action if they don’t."

Alongside its heating oil investigation, the CMA has separately written to suppliers of liquified petroleum gas (LPG) to remind them of their obligations under consumer protection law. LPG is a domestic fuel, like heating oil, and is used for cooking and heating by people who are not connected to the grid. At this stage, it should not be assumed that the suppliers have infringed consumer protection law, and no finding has been made.

Next steps

The CMA will now work with governments, regulators and industry to consider and take forward its recommendations. It will also continue discussions with suppliers on the proposed compensation scheme.

For more information on the market study, visit the dedicated CMA case page: Heating oil market study: [https://www.gov.uk/cma-cases/heating-oil-market-study]

CMA statistics figure can be viewed here: [https://tinyurl.com/4wwkuwnw]

• Around 1.5 million households in the UK rely on kerosene (heating oil) to warm their homes and provide hot water.

• Consumers paid around £200 more for a typical 500-litre order in March 2026 than they would have in February 2026 – increasing from around £320 to £520 (64%). Around £170 of that increase reflected higher wholesale costs.

• Wholesale price increases accounted for 83% of the retail price increase in March 2026, while supplier operating costs accounted for a further 6% (2ppl).

• From February to March 2026, average prices for heating oil increased by 64% (41ppl) from 64ppl to 104ppl, and peaked at 123ppl in April 2026 – a 92% increase from February.

• Average prices declined by 15% in May 2026 to 104ppl – although they remain elevated compared to pre-conflict levels.

• An estimated 60% of UK orders for heating oil are placed online.

Email

For general public: general.enquiries@cma.gov.uk

For media: press@cma.gov.uk

Telephone numbers

For media: 020 3738 6460

For media – out of hours: 020 3738 6878

Opening hours

Monday to Friday, 9am to 5:30pm. On bank holidays, or outside of working hours, media can call the out of hours number or use the media email address above.

Tags

More Like This

Over £50 million to help families struggling with soaring heating oil costs

Drivers still paying too much for road fuel says CMA

CMA steps up monitoring of petrol and diesel prices

High fuel margins continue to inflate pump prices for motorists

Chancellor sets out plan to crackdown on profiteering and drive Britain's energy security

Heat network customers to be shielded from unfair price hikes

Greater protection for families and businesses in energy market

Major reforms would require vet businesses to make fundamental changes to the way they support pet owners