The Competition and Markets Authority has recommended stronger protections for the 1.5 million UK households that rely on heating oil, particularly in rural and off-grid communities.
The watchdog launched a market study after conflict in the Middle East caused disruption and average retail prices rose by as much as 92% at their peak. It found that the price increases largely reflected higher wholesale costs and that suppliers had not materially profited from the crisis.
The CMA said the home heating oil market is generally competitive, with most households able to choose between suppliers and access information to help them find a deal. Prices tend to be lowest in Northern Ireland, where more than 60% of households rely on heating oil and shorter delivery distances help reduce costs.
However, the watchdog found that customers do not have the same protections as those using mains gas and electricity. Heating oil is usually bought in large volumes, meaning households can face bills of about £500 or more at a time.
The CMA said gaps include inconsistent standards of support for vulnerable customers and a lack of access to alternative dispute resolution where complaints cannot be settled with a supplier. It warned these weaknesses become more serious during periods of volatility caused by severe weather or geopolitical disruption.
Recommendations to the UK and devolved governments include a new proportionate regulatory regime for heating oil suppliers. The CMA said this should include registration, minimum standards on price quotes and cancellations, and access to independent support. It is also taking action over around 1,700 households whose orders may have been cancelled in breach of contract, potentially costing them up to £350.