Around 1,700 households that faced cancelled heating oil orders and steep price increases when the US-Israel war with Iran erupted will receive compensation, according to the UK's competition watchdog. The Competition and Markets Authority (CMA) said some customers were forced to reorder at significantly higher prices or go without fuel, costing them up to £350.
The regulator announced that several suppliers have agreed to compensate affected customers and that it is preparing legal action against those that have refused. The UK and Ireland Fuel Distribution Association (UKIFDA), representing heating oil suppliers, acknowledged "a small number of cases which require redress."
Wholesale oil prices surged from around $70 a barrel at the start of the Iran war in February to nearly $120 a barrel by the end of March, as conflict disrupted energy transportation and production. UK heating oil retail prices peaked at 92% above pre-conflict levels, the CMA said. However, its investigation found that the increases largely reflected rising wholesale costs and that suppliers did not materially profit from the crisis.
The CMA concluded that heating oil customers lack the protections afforded to those connected to the energy grid. It recommended new regulations on price quoting and order cancellations, along with better support for vulnerable consumers.
Chancellor Rachel Reeves commented: "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 chief executive Ken Cronin said the association would work with government bodies on the recommendations.
The CMA did not specify how many suppliers have agreed to compensate, how many customers will receive payouts, or the exact amounts. It stated: "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." The regulator added that it is preparing court-based enforcement action against firms that fail to compensate voluntarily.
One affected customer, Anthony Maines, 31, from Seaton Delaval in Northumberland, paid £463.83 for 700 litres of heating oil on 28 February, only to have the order cancelled days later. He was forced to reorder 500 litres for around £700 through a different broker. "It felt like I was being punished for doing the sensible thing," he said. His broker eventually agreed in May to honour the original price, but by then he had already paid a higher price elsewhere.