UK Heating Oil Customers to Receive Compensation After Iran War Cancellations

Heating oil customers whose orders were cancelled and prices raised after the US-Israel war with Iran will receive compensation, the Competition and Markets Authority said. Some 1,700 households were forced to reorder at higher prices or go without fuel, costing them up to £350. Some suppliers have agreed to compensate affected customers.

The CMA is preparing court-based enforcement action against firms that refuse to compensate voluntarily. Customers who paid more to replace cancelled orders 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.

Wholesale oil prices jumped from around $70 a barrel at the start of the Iran war in February to almost $120 a barrel by the end of March.

Average retail heating oil prices were, at their peak, 92% higher following the conflict. The CMA's four-month investigation found that price increases largely reflected rising wholesale costs and that suppliers have not profited materially from the crisis. The regulator concluded that heating oil customers are not as well protected as those connected to the energy grid.

It recommended new regulations on how prices are quoted and cancellations are handled, as well as better support for vulnerable consumers. The report follows the launch of the investigation in March. Chancellor Rachel Reeves said it is reassuring to know it is a competitive market but the lack of protection for these households does concern her.

UKIFDA chief executive Ken Cronin said the association will work with all government bodies on the recommendations. Some 1.5 million households in the UK depend on heating oil and do not have the same consumer protections as electricity and gas customers. Sixty percent of households in Northern Ireland rely on it.