The Competition and Markets Authority has concluded that the UK's home heating oil market is broadly competitive, but households using the fuel still operate with weaker consumer safeguards than customers on the gas and electricity networks. In its government update on the market study, the CMA said around 1.5 million households rely on heating oil for space heating and hot water, with the issue falling most heavily on rural and off-grid communities. The study was opened after conflict in the Middle East disrupted supply conditions and pushed retail prices sharply higher in early 2026. According to the CMA, average prices rose from 64 pence per litre in February 2026 to 104 pence per litre in March 2026, before peaking at 123 pence per litre in April 2026. That translated into a typical 500-litre order rising from about £320 to around £520 in March, leaving many households exposed to a large one-off cost rather than a monthly bill.
CMA analysis indicates that most of the increase reflected wholesale costs rather than exceptional supplier margins. The Authority said wholesale movements explained 83 per cent of the retail price rise in March 2026, while supplier operating costs accounted for a further 6 per cent, or roughly 2 pence per litre. On that basis, the CMA said suppliers had not materially profited from the crisis. Price outcomes were not even across the UK. The CMA said Northern Ireland generally recorded the lowest prices because households are more concentrated and delivery costs are lower, while more remote areas, including parts of Scotland, faced weaker supplier choice and higher delivery costs. The nation-level figures show the variation clearly: Scotland rose from 69 to 113 pence per litre between February and March 2026, Wales from 64 to 106, England from 65 to 103, and Northern Ireland from 57 to 97.
The central policy finding is therefore not that the market failed to function in normal conditions, but that heating oil consumers do not have the same protection framework as those connected to the grid. The CMA highlighted gaps around support for vulnerable customers, clear standards on supplier conduct and access to independent alternative dispute resolution when complaints cannot be settled directly. Those gaps become more significant during periods of volatility. The CMA pointed to severe weather, geopolitical disruption and tighter urgent-delivery capacity as moments when households may face sharply higher prices, uncertainty over whether a delivery will arrive and limited scope to switch quickly. With heating oil typically bought in large volumes, and around 60 per cent of UK orders placed online according to the CMA, clear quoting, transparent terms and dependable fulfilment become basic consumer protection issues rather than minor service questions.
In response, the CMA has recommended that the UK Government and the Northern Ireland Executive introduce a new proportionate regulatory regime for heating oil suppliers. The Authority's proposal is for a minimum rules-based framework, not a full replication of gas and electricity regulation, but one that still creates enforceable expectations across the market. According to the CMA, that regime should require suppliers to register and meet baseline standards covering how prices are quoted, how cancellations are managed and how households can access independent dispute resolution. It should also require clearer signposting of payment plans and minimum purchase volumes, alongside a register for vulnerable households so that support can be organised more quickly when supply conditions deteriorate.
The recommendations go further than supplier conduct. The CMA has also called for a review of rules and practices around minimum order volumes so that households can buy smaller amounts of heating oil. For many consumers, that is a cash-flow issue as much as an energy issue: when prices spike, the ability to order less than the standard volume may reduce immediate financial pressure even if the unit price remains high. The Authority has also pointed to territorial policy responses. It suggested that Scotland could consider a price-checking service modelled on the Consumer Council for Northern Ireland tool, which already offers households a clearer view of prevailing local prices. In parallel, the CMA said governments should consider whether communities most exposed to higher and more volatile heating oil prices should be prioritised as alternative energy systems are rolled out.
Alongside the market study, the CMA has investigated concerns that a small number of suppliers may have breached contracts by cancelling customer orders as prices were rising. Its analysis suggests that around 1,700 households may have been affected. While those consumers received refunds for the cancelled orders, the CMA said many either had to reorder at significantly higher prices or went without fuel, with estimated additional costs of between £150 and £350 for some households. Following engagement by the Authority, a number of suppliers have agreed to compensate affected customers. Where replacement oil was bought at a higher price, the proposed remedy is a payment covering the difference. Where households did not reorder, the original order would be honoured at the agreed price. The CMA has made clear that not all affected suppliers have agreed to this approach and that it is preparing court-based enforcement action where voluntary compensation is not secured.
Sarah Cardell, the CMA's chief executive, has presented the issue as one of basic household need rather than market design alone, arguing that competition by itself does not guarantee fair treatment when disruption occurs. That is the broader significance of the study. The market may be competitive in ordinary periods, but off-grid households remain more exposed when events place pressure on supply and pricing. The CMA has separately written to suppliers of liquefied petroleum gas to remind them of their duties under consumer protection law, while stating that no finding of infringement has been made. The next phase now sits with governments, regulators and industry. The CMA said it will work with each of them to consider implementation of its recommendations while continuing discussions on the compensation scheme. For ministers, the question is whether domestic consumer protection should continue to vary according to the fuel a household happens to use.