Heating Oil Crisis: Reeves Promises Help
UK households face soaring heating oil prices after oil hit $120 a barrel. Chancellor Rachel Reeves considers relief as rural and Northern Ireland homes feel the squeeze.
Chancellor Rachel Reeves has promised to explore options to address the "unique challenges" faced by households relying on heating oil amid the US-Israel war with Iran.
On Monday, global oil prices reached nearly $120 per barrel, their highest level in four years, as the war raises fears of prolonged supply disruptions.
People who use heating oil often store it in a tank outside their property and are the first to be affected by rising prices.
Reeves promised a meeting on Wednesday between the Treasury and rural and Northern Ireland MPs to consider "what action we can take" to help those who use heating oil.
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This increase has led to a sharp increase in the price of heating oil, with bills for households in Northern Ireland increasing by 81%, while prices for some rural homes in England are reportedly doubling.
Just as households benefit from regulator Ofgem's price caps on gas and electricity bills, there is no limit on the price of heating oil.
Energy Secretary Ed Miliband warned the Chief Executive of the UK and Ireland Fuel Distributors Association (UKIFDA) on Monday that the rise in heating oil prices had been "significant" and "caused concern for homes and businesses."
According to the 2021 census, just 3% of households in England and Wales said oil was their only source of central heating, and 5% in Scotland.
However, nearly two-thirds of homes in Northern Ireland use oil for heating, by far the highest share among UK countries.
According to the Consumer Council, approximately 500,000 homes in NI use heating oil and approximately 284,000 use natural gas.
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Fran Barrett, who lives in a Cheshire village that isn't on the gas network and where everyone relies on oil, said she first saw prices double, and now she can't get deliveries.
Barrett, a teacher, said her oil tank is about a third full and she's saving what's left for hot water, having turned off her heating completely.
"The first quote I got was £314 for 500 liters... then it rose to £653 within two or three days of the fighting starting," she said.
By Monday, Barrett was being told there were no suppliers in her area.
Addressing MPs, Reeves said: "I recognize that households that use heating oil face particular challenges, and so I have asked the Financial Secretary to the Treasury to engage with officials and rural and Northern Irish MPs to consider what further action we can take."
This comes after the watchdog Competition and Markets Authority (CMA) warned that the war is "putting upward pressure on heating oil prices."
Emma Cochrane, acting executive director of consumer protection, warned suppliers not to profit by raising the price of heating oil for those who have already placed orders.
Cochrane warned, "If we suspect that consumer or competition law is being broken, we will not hesitate to take action." Reeves said on Monday that he had asked the CMA to "monitor the prices of essential commodities such as road fuel and heating oil."
Conservative Party Leader Kemi Badenoch expressed concern about exploitative heating oil suppliers breaking contracts with customers to raise prices.
She said the market is "rife with bad habits even in good times," but the situation has become "critical."
She called on the CMA to launch an investigation into the heating oil market.
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