Stronger protections for heating oil customers
Reforms to the heating oil sector are being planned to ensure stronger regulation and protections for consumers
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Major reform planned for heating oil sector to place stronger regulation and better consumer protections at its heart for the first time
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News comes after some suppliers cancelled orders when heating oil prices increased earlier this year, forcing customers to re-order and pay more
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Latest step to put consumers first in the energy market and protect rural households
Households on heating oil will benefit from better protections under government plans to regulate the market for the first time.
Stronger consumer protection measures will help make sure families who rely on heating oil are treated fairly, especially when global pressures cause prices to rise.
The news comes as the government confirms it will accept the Competition and Markets Authority’s (CMA) recommendation to strengthen regulation in the heating oil sector.
This aims to formalise the standards consumers should expect from their suppliers, protect vulnerable households from harm, and give people clearer routes to compensation when things go wrong.
It follows the outbreak of conflict in the Middle East earlier this year, when rising oil and gas prices sent the cost of heating oil soaring to record highs for households across Britain.
The CMA later found that 1,700 households were owed compensation after they were forced to re-order heating oil at higher prices when their orders were cancelled by suppliers.
The government stepped in with £53 million in immediate support to help vulnerable heating oil customers through the crisis, but Ministers are now determined to make fundamental reforms to the market so that families do not have to worry about getting a fair deal when wholesale prices rise.
It marks another step to make life’s essentials work for people by putting energy under stronger public control, supporting rural households and bringing back hope to communities.
Minister for Energy Consumers Polly Billington said:
Thousands of heating oil customers felt they had nowhere to turn when they paid the price of rising oil and gas costs earlier this year.
We won’t accept that. Energy is an essential good and people should not have to think twice about whether they’re protected in the market.
That’s why we will reform the sector, holding heating oil suppliers to account and giving consumers confidence that they will get a fair deal.
Together with industry, the government will now work to develop a regulatory regime for the heating oil market, protecting consumers and promoting competition.
Households will be better supported in the short term, with strengthened consumers’ protections in Codes of Conduct which set rules for the industry.
Industry practices setting minimum order volumes at 500 litres for some consumers, requiring them to pay for more heating oil than they may need, will be reviewed, helping to give people breathing space with the cost of living.
This follows the announcement earlier this year of reforms to the energy regulator Ofgem so that it is fit for the future and can support all consumers in today’s energy market.
Heating oil customers are also eligible for extra support to get onto homegrown clean energy, after the government increased its discount off the cost of a heat pump to £9,000 for households who use heating oil.
Record numbers of consumers have applied for a heat pump through the Boiler Upgrade Scheme following the uplift – with July’s application figures marking an 81% jump compared to the previous year.
1,042 voucher redemptions paid in August were for the £9,000 heating oil grant, representing 32% of the total for the month.