Government confirms £350 compensation for heating oil customers affected by price surge

Heating oil customers who faced cancelled orders during a recent price surge triggered by the Middle East crisis are set to receive up to £350 in compensation. The Competition and Markets Authority (CMA) revealed that approximately 1,700 people were adversely affected when tensions escalated after the United States attacked Iran.

According to the CMA’s report published on Wednesday, these customers experienced possible breaches of contract. Although refunds were issued for their original orders, many were forced to either pay significantly higher prices—ranging from £150 to £350 more—for replacement orders or face the prospect of going without fuel.

Sarah Cardell, the CMA’s chief executive, described how these customers had been “left in limbo” due to the cancellations. She noted, “While it’s encouraging that some suppliers have agreed to compensate customers, a number of firms still have not. We will press them to do so and are preparing to take enforcement action if they don’t comply.”

The CMA also highlighted that while suppliers did not materially profit from the crisis, consumers reliant on heating oil do not enjoy the same level of protection as those connected to the gas grid. To address this gap, Cardell urged the introduction of “stronger safeguards” and confirmed that the CMA has recommended the UK and devolved governments establish a new regulatory framework specifically for heating oil suppliers.

Labour Party chancellor Rachel Reeves welcomed the CMA’s findings and said, “When the conflict in the Middle East drove a sharp rise in heating oil prices, I acted quickly to provide financial support to homes reliant on oil. I also asked the CMA to investigate the market to ensure consumers were treated fairly. While it’s reassuring that the market remains competitive, the current lack of protection for these households is concerning, and we will seriously consider what further measures can be taken.”