The Government has accepted all recommendations from the Competition and Markets Authority’s heating-oil market study and will develop a framework to regulate the sector for the first time. The announcement affects about 1.5 million UK households, many in rural and off-grid communities. It sets a direction for reform, but does not mean a finished set of new rules is already in force.
Protections are weaker than for gas and electricity
The CMA examined the retail supply of heating oil for domestic use. The Government’s response says the study found recent price rises were largely driven by higher wholesale costs, rather than a lack of competition or excessive profits. That distinction matters: the response is not an allegation that suppliers as a group profited improperly. Instead, the policy concern is that households buying heating oil do not have many of the safeguards available to gas and electricity customers.
The gaps identified include weaker rights when a problem occurs, limited access to redress and dispute resolution, less price transparency and less support for vulnerable households. Heating oil is commonly used by homes outside the mains-gas network, so the impact is concentrated in rural and off-grid communities. The 1.5 million figure is a UK-wide estimate of people or households relying on the fuel as described in the official material; it should not be read as a count of customers already covered by a new protection scheme.
A programme of work, not regulations in force
The Government says it will work with Ofgem, the devolved governments, industry and consumer representatives to develop options for proportionate regulation. It says the work will be supported by evidence, engagement and an appropriate legislative framework. The stated aims are clearer standards, stronger consumer rights, better support for vulnerable people and easier access to redress, while maintaining competition, investment and security of supply.
The timetable and final shape are not settled in the statement. Officials say getting the approach right will take time. That means consumers should distinguish between the commitment to build a regulatory framework and protections that can be relied on today. The announcement does not specify a commencement date, final regulator powers or a completed rulebook.
In the meantime, the Government plans to seek improvements to existing industry codes of practice, promote access to appropriate dispute-resolution routes that already exist and raise awareness of available support. Those are interim steps, not a substitute for the planned framework. Their practical effect will depend on the detailed changes and how widely suppliers and customers use the relevant arrangements.
Delivery sizes and payment plans under review
The Government will examine whether minimum order volumes create affordability or access barriers, whether smaller deliveries should be more available, and whether payment plans could help. It will also consider whether more action is needed on price transparency. These are questions for assessment, not confirmed bans on minimum orders or guaranteed new payment rights. The statement says intervention will be considered where there is a clear case for better consumer outcomes, while avoiding unnecessary burdens where markets work effectively.
These issues can matter acutely when a household has little storage capacity or cannot afford to buy a large quantity at once. Heating oil customers also make purchasing decisions in a market where prices can move with wholesale costs. Clearer information and accessible dispute routes could help households compare offers and challenge problems, but the policy work has yet to specify how such protections would operate.
Lessons from cancelled orders
The response points to difficulties at the start of the Middle East crisis, when thousands of customers had orders cancelled and were forced to reorder at higher prices. It presents that episode as a reason to improve consumer protection when the market comes under pressure. The statement does not claim the new framework would prevent global price shocks or establish that every cancellation was unlawful.
The Government also cites more than £50 million in financial support to help with heating-oil costs and clean-heat grants worth £9,000 for households switching to lower-carbon heating. Those measures form part of the policy context, but are separate from the consumer rules now being developed. The immediate test will be whether interim code and dispute-resolution work provides practical help while the longer process defines what fair treatment, transparent pricing and redress should require across the sector.
