The government has announced plans to regulate the domestic heating oil market for the first time, following concerns that some suppliers cancelled customer orders as prices rose sharply earlier this year.
In a statement published on 13 October 2026, the Department for Energy Security and Net Zero said it had accepted the Competition and Markets Authority’s (CMA) recommendation for stronger oversight and consumer protections. Around 1.5 million UK households rely on heating oil, particularly in rural areas beyond the mains gas network.
Cancelled orders and higher replacement costs
The CMA identified around 1,700 customers affected by possible contractual breaches after heating oil orders were cancelled during a period of price volatility. Some households had to reorder at substantially higher prices or went without fuel. The regulator estimated that replacement orders could cost affected customers between £150 and £350 more.
The CMA said in August that suppliers involved in its compensation arrangements had agreed to provide redress. Eligible customers were being contacted directly, with those buying replacement oil asked to provide evidence of their purchases. The figure of 1,700 relates to customers identified in the CMA's earlier investigation; it is not a new count of cancellations in October.
What ministers propose
The government has accepted the case for a proportionate regulatory system covering heating oil distributors. Proposals include clearer standards for suppliers, improved access to dispute resolution, support for vulnerable households and regulatory oversight. Ministers say they will work with industry to strengthen existing codes of conduct while longer-term measures are developed.
The government is not proposing to introduce a heating oil price cap equivalent to the gas and electricity price cap. The CMA concluded that price regulation should not be pursued at this stage.
Why heating oil households face different protections
Unlike customers buying mains gas and electricity, heating oil users do not currently benefit from the same sector-specific regulatory framework. The CMA's market study found that prices surged during the spring: average prices for a typical 500-litre order rose from approximately £320 in February to £520 in March 2026.
Energy Consumers Minister Polly Billington is named in the government's announcement, which describes the reforms as a step towards fairer treatment for households dependent on heating oil.
When will the rules change?
The measures are proposals rather than regulations already in force. The government has not set a definitive date for a new statutory regime. Existing consumer protection law continues to apply while ministers, regulators and industry bodies consider the next steps.
Sources
- Department for Energy Security and Net Zero: Stronger protections for heating oil customers (13 October 2026)
- Government response to the CMA heating oil market study (13 October 2026)
- CMA: UK’s heating oil households need stronger protections (15 July 2026)
- CMA: Compensation for heating oil customers (28 August 2026)