Heating oil suppliers told compensate customers for price surge at start of Middle East conflict

By ANGHARAD CARRICK, BUSINESS NEWS EDITOR The competition regulator has called on heating oil suppliers to compensate some of their customers following an investigation into possible profiteering. The Competition and Markets Authority launched a probe into the heating oil market after the Middle East conflict pushed prices higher, with some customers facing a near tripling of their usual bill. In some cases, customers reported having had their orders cancelled before being offered a new quote at a higher price. Heating oil users are mainly in rural areas which cannot be connected to the gas grid. Instead of gas coming through pipes, their boilers are fuelled by kerosene oil which is stored in a tank on their property.  The CMA found that around 1,700 customers were affected by possible breaches by their supplier, which saw them pay between £150 and £350 more for their heating oil. While the watchdog said several suppliers had agreed to compensate affected customers, it said it was 'disappointing' that not all had agreed to do so. Off-grid: Rural households often have boilers powered by kerosene oil, which is delivered to a tank like this one  'The CMA is continuing to engage with those suppliers and is preparing to take court-based enforcement action against firms that fail to compensate customers voluntarily,' it said. The competition watchdog's probe found that, on the whole, suppliers had 'not profited materially from the crisis' but it noted that heating oil customers are not as well protected as those connected to the grid. The domestic heating oil market is unregulated, leaving rural households vulnerable during price shocks. Most households are protected by the Ofgem price cap or fixed tariffs, but those who rely on heating oil are exposed to daily movements. The CMA found that heating oil prices were found to be lowest in Northern Ireland, while those in remote areas including parts of Scotland had less choice of suppliers and therefore faced higher prices. It also found that there are 'clear gaps' in the protections available to heating oil customers. It said these become 'especially problematic during periods of volatility'. Suppliers will now be required to register and meet minimum standards around how prices are quoted and cancellations are managed and give households access to independent dispute resolution. They will also need to clearly signpost payment plans and minimum purchase volumes, in addition to creating a register for vulnerable households. The CMA is also recommending a review of rules and regulations around minimum order volumes to allow people to buy smaller amounts of heating oil. Sarah Cardell, chief executive of the CMA, said: 'Heating our homes and having reliable hot water are basic needs. While the home heating oil market is generally competitive, that is not enough to ensure good outcomes for all. 'Stronger safeguards are needed – including regulatory oversight and better support for vulnerable consumers as well as communities living in areas of the UK that are particularly exposed to higher and more volatile prices.  'These practical changes will help ensure people receive fair treatment, clear information and appropriate support when disruptions occur.' Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. Terms and conditions apply on all offers.