Rachel Reeves to Set Out Extra Support for UK Households Facing Surge in Heating Oil Costs
The government will set out measures to help households hit by a sharp rise in the cost of heating oil after crude prices jumped following the outbreak of the US-Israeli war with Iran. Chancellor Rachel Reeves said she had “found the money” to help, and the Prime Minister will outline support plans at a Monday news conference.
Heating Oil Price Spike, Supply Strain and Who Is Affected
Wholesale crude oil has jumped above $100 a barrel from about $71 before the conflict began, with prices briefly touching nearly $120 a barrel before slipping back and finishing a recent trading day close to $104. The price surge has pushed up the cost of heating oil, leaving some customers reporting bills that have doubled and others seeing quoted refills almost triple. The rise has been driven mainly by the effective closure of the Strait of Hormuz, a key artery for global oil supplies.
The impact is concentrated in areas where homes are not connected to the mains gas network. An estimated 1. 7 million UK households rely on heating oil for heating and hot water. In Northern Ireland the problem is particularly acute: about 500, 000 homes use heating oil, representing almost two-thirds of households there. In England and Wales, roughly 3% of households said oil was their only source of central heating in the 2021 census, with about 5% in Scotland.
Government Response: Targeted Support and Enforcement Action
Prime Minister Sir Keir Starmer is expected to set out support plans at a Monday news conference, with reports putting the cost at around £50m. He is also expected to warn that he will not tolerate companies trying to exploit the crisis after accusations of price gouging and disrupted supply, and to raise concerns about cancelled orders and pushed-up prices. If companies have broken the law, he is expected to say, there will be legal action.
Chancellor Rachel Reeves has signalled targeted help for low-income and vulnerable households, noting the unique challenges faced by those reliant on heating oil who must find hundreds of pounds upfront when a tank runs empty. Plans are expected to channel assistance using existing local delivery mechanisms in England, and devolved governments in Scotland, Wales and Northern Ireland will receive money to deliver support locally.
Market Checks, Deliveries and Local Impact
The Competition and Markets Authority has been asked to monitor prices and the market. The CMA’s head, Sarah Cardell, said the authority was urgently looking into the issues and would “not hesitate to take enforcement action if potential breaches are identified. ” The UK and Ireland Fuel Distributors Association has said its members have seen a very large and unexpected increase in demand and that many distributors are honouring orders as quickly as they can.
Local MPs and campaigners have warned of immediate hardship: some constituents have been forced to turn off heating when tanks run empty, face cancelled orders, or struggle to find suppliers willing to deliver. One MP warned this could become a public health issue for elderly and vulnerable people unable to heat their homes or cook.
For now, household gas and electricity bills in England, Wales and Scotland remain protected by the energy price cap set by the regulator Ofgem, with bills expected to fall in April under the cap. Heating oil users do not benefit from that cap, which is why officials are prioritising targeted support and market scrutiny for this group.
The government will provide further details when the Prime Minister and Chancellor set out the package and implementation plans at the scheduled announcement on Monday.
