Hundreds of households across the UK may soon receive compensation after heating oil suppliers cancelled confirmed deliveries during a period of rising prices, leaving some customers facing significantly higher costs. The Competition and Markets Authority has reached agreements with several suppliers to compensate affected households, while warning that enforcement action could follow against companies that have not yet agreed to provide redress.
For many households in rural parts of the UK, heating oil remains the primary source of home heating. Unlike gas and electricity, the heating oil market is largely unregulated, a situation that came under scrutiny after widespread delivery cancellations during a period of market volatility.
According to the Competition and Markets Authority (CMA), around 1,700 customers were affected this spring after suppliers withdrew agreed deliveries following a sharp increase in heating oil prices linked to renewed instability in the Middle East. Although customers received refunds for cancelled orders, many were forced to secure replacement supplies at substantially higher prices to avoid being left without heating.
Customers Faced Additional Costs After Cancelled Orders
The CMA found that many affected households had already accepted quoted prices and believed their deliveries had been confirmed before suppliers cancelled them. While refunds were issued, customers often had little option but to purchase heating oil elsewhere at higher market prices.
According to the CMA, some households paid between £100 and £350 more than they had originally expected. The regulator has now secured agreements from a number of heating oil suppliers to compensate customers who experienced these additional costs.
Under the arrangements, eligible customers will either receive payments covering the difference between the original agreed price and the cost of their replacement delivery, or have their original order honoured at the previously agreed price if they chose not to place another order after the cancellation.
The CMA has not confirmed when compensation payments will begin. It also said that not every supplier involved has agreed to participate in the compensation arrangements. The regulator stated: “A number of firms still have not agreed to compensate affected customers. We’ll be pressing them to do so and are preparing to take enforcement action if they don’t.“
Regulator Calls for Stronger Protections in the Heating Oil Market
Heating oil remains the main source of heating for around 1.7 million homes across the UK, particularly in rural communities that are not connected to the gas network. According to the CMA, customers using heating oil have fewer consumer protections than those purchasing gas or electricity because the sector is largely unregulated.
The regulator’s investigation also identified regional differences in heating oil prices. According to the CMA, Scotland recorded the highest average heating oil prices, while Northern Ireland had the lowest. It also noted that households in rural and remote areas frequently face higher costs because of a smaller number of suppliers and increased delivery expenses.
Alongside the compensation agreements, the CMA has issued recommendations aimed at improving consumer protection within the sector. These include introducing minimum standards for price quotations and delivery cancellations to reduce the likelihood of similar situations occurring in future.
The regulator is also urging ministers in Westminster and the Northern Ireland Executive to introduce stronger safeguards for heating oil customers. Its recommendations follow the disruption experienced by households during this spring’s price increases, when many customers found themselves paying considerably more than expected after confirmed deliveries were cancelled at short notice.
