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The Competition Markets Authority (CMA) has announced that customers who experienced cancelled heating oil orders and increased prices following the outbreak of the US-Israel conflict with Iran will receive compensation. According to the CMA, approximately 1,700 households were impacted, having to either place new orders at much higher rates or go without fuel altogether, with losses reaching up to £350 per household. While some suppliers have agreed to reimburse affected customers, the regulator intends to pursue legal action against those who have yet to comply.
During the conflict, wholesale oil prices surged dramatically—from around $70 per barrel at the start of February to nearly $120 by the end of March—due to disruptions in energy production and transportation in the affected region. This spike was reflected in UK heating oil prices, which the CMA reported peaked at an average increase of 92%. Their investigation determined that the price hikes were largely driven by wholesale costs and that suppliers did not gain substantial profits from the crisis. Nevertheless, the report highlighted that heating oil consumers lack the protection afforded to those connected to the electricity and gas grids.
In response to these findings, the CMA has suggested new regulations aimed at improving transparency around price quotations and the management of order cancellations, along with enhanced support for vulnerable consumers. The UK and Ireland Fuel Distribution Association (UKIFDA), representing heating oil providers, acknowledged that a small number of cases require redress. Chancellor Rachel Reeves expressed her concern about the inadequate consumer safeguards, stating, “It is reassuring to know it is a competitive market but the lack of protection for these households does concern me so we will look very seriously at what can be done.” UKIFDA’s chief executive Ken Cronin also committed to collaborating with government bodies to implement the CMA’s recommendations.
Details remain unclear regarding how many suppliers have agreed to compensate affected customers and the total payouts involved. The CMA explained that customers who had to purchase replacement oil at inflated prices will be reimbursed for the difference, while those who did not buy replacement heating oil will have their original orders honored at the agreed price. Enforcement actions through the courts are being prepared against companies refusing to provide voluntary compensation. Additionally, the CMA’s four-month investigation, launched in March, emphasized that about 1.5 million households rely on heating oil—primarily in Northern Ireland, where it is the main heating fuel for 60% of homes—and they currently lack the consumer protections available to electricity and gas users.
One affected consumer, Anthony Maines from Seaton Delaval, Northumberland, shared his experience of this issue. He initially paid £463.83 for 700 litres of heating oil at the end of February through a broker, anticipating price rises due to the conflict. However, his order was cancelled days later, forcing him to buy 500 litres at almost £700 from a different broker. Reflecting on the situation, Anthony said, “It felt like I was being punished for doing the sensible thing,” though his broker eventually agreed in May to honor the original order price, after he had already paid much more elsewhere
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