Off-grid households absorb the rise as CMA calls for stronger safeguards
UK heating oil, used by about one-and-a-half million people across the UK who are not connected to the mains gas network, has risen to 111 pence per litre (ppl) from about 60ppl before the war in Iran began in March, according to price comparison site Boiler Juice. The vast majority of those people live in rural locations, and the heating-oil market is unregulated, unlike gas and electricity, so global crude-price swings pass through to customers as the war in Ukraine and tensions in the Middle East continue to affect supply.
The price peaked at 134ppl in March before easing and then climbing again as colder weather sets in. Most domestic tanks hold about 500 litres; filling one now costs about £550, compared with roughly £300 before the war.
In Minety, north Wiltshire, where most homes rely on heating oil, Peter Mason said he was approaching the end of his tank and needed to top up for winter. “I’m getting toward the end of the tank and need to top up for winter… it will be over £550,” Mason said. Mason said last year “it was about £300 to fill up - it is horrendous.” He added: “The price goes up and down. It can vary plus or minus £50 but it has never been as high as it is today.” The retired homeowner said he would have to cut back elsewhere. “It means I’ll have to eek out what I spent my money on. I’m retired, its not like I can change jobs. I have to be really careful and pull money out of savings.”
Dylan Williams, 51, who runs the van-driving business Van & I of Monmouth in Wales and regularly operates in the Forest of Dean, Stroud and South Gloucestershire, said he is currently paying more for fuel than he ever had in the three years of running his business. Williams said he had had to put the prices of his services up to offset the rise. At the start of the year he would pay between £120 and £130 for a full tank, Williams said; that figure had risen to £160. “It’s ever increasing, ever worrying - keeping an eye on the news, keeping an eye on the diesel prices,” Williams said. “I’ve got fuel cards… you don’t pay the pump prices, you pay the fuel card prices but it doesn’t make much a difference these days. It’s a few pence really.”
Yvette Farrell, volunteer director at Dean Forest Kitchen, which cooks and delivers fresh meals to clients across the Forest of Dean, said the not-for-profit has little margin to absorb the rise. “It’s impacted us a lot because we work on a not-for-profit scenario so there is not a lot of wiggle room when it comes to increase in any expenses,” Farrell said. “So the cost of fuel is really, really hitting the business hard and we’re having to do our best to still keep going to our clients who are spread across a very rural area with no public transport.” Farrell said the meals must reach clients who would otherwise be alone. “But we have to take these meals to them because… they will not have somebody coming to see them during the day because they’re so isolated,” she said. The organisation might have to raise prices because there is “not going to be much choice in the future,” Farrell added.
Tristan Holland, company director at TLC Support Service, which provides community care in Wotton-under-Edge and Dursley, said staff use their own vehicles and the company pays mileage at 55p per business mile. “We had an increase in our fees back at the start of the year, just kind of taking into account all the extras that were coming in this year but even that does make it tight,” Holland said. “Everything has risen - the cost of the fuel, the training, even the uniforms that we purchased. Everything has gone up and so we try to keep our services as affordable as we possibly can but there has to be a profit or else we just can’t carry on going.”
The BBC reported that the war in Iran has disrupted wholesale oil production and transportation, leaving prices sensitive to the words and actions of key political figures, and that for people who rely on heating oil, it means feeling helpless. It is thought prices could come down if there is a peace deal between the US and Iran, the broadcaster added.
Richard Willan, who runs the Nadder Oil Buying Club in Wiltshire, where more than 1,000 residents buy in bulk together to secure a better price, said rural households were increasingly vulnerable as colder weather sets in. “We are watching to see what happens with (Donald) Trump in the mid-term elections in America, that might change things again,” Willan said.
Sarah Cardell, chief executive of the Competition and Markets Authority, said heating-oil customers in remote areas were too exposed to price shocks. “Stronger safeguards are needed - including regulatory oversight and better support for vulnerable consumers as well as communities living in areas of the UK that are particularly exposed to higher and more volatile prices,” Cardell said.
Corinne Pluchino, chief executive of Action in Rural Communities England, said the organisation is asking the government to remove VAT on heating oil and LPG for six months in this month’s budget. “Without specific targeted support for heating oil and LPG users, thousands of rural people risk becoming the forgotten victims of the energy crisis,” Pluchino said. Locally run schemes also exist, including the Surviving Winter campaign organised by charities in Wiltshire, which supported more than 3,000 people last year with the cost of heating.
A spokesperson for the Department for the Environment and Net Zero said the government is helping thousands of households on heating oil switch to clean heat with grants worth £9,000, alongside a dedicated resilience fund for areas with higher rates of oil heating. “We urge eligible households to apply,” the spokesperson said.