New protections proposed for Northern Ireland’s heating oil households

Households across Northern Ireland who rely on home heating oil could benefit from stronger consumer protections after the UK’s competition watchdog called for new regulations to better safeguard customers during periods of price volatility.

The Competition and Markets Authority (CMA) has recommended that the UK Government and Northern Ireland Executive introduce a new regulatory framework for the heating oil sector, arguing that the current system leaves around 1.5 million UK households with fewer protections than those connected to mains gas or electricity.

More than 60% of households in Northern Ireland heat their homes with oil – the highest proportion anywhere in the UK – making the region particularly affected by the proposals.

Why the CMA launched its investigation

The CMA began examining the heating oil market after conflict in the Middle East triggered sharp increases in fuel prices earlier this year.

The watchdog found the average cost of a typical 500-litre delivery rose from around £320 in February to £520 in March, before peaking at approximately £615 in April. While prices later eased, they remain significantly above pre-crisis levels.

Its analysis concluded that most of the increase reflected higher wholesale costs rather than excessive profits by suppliers.

Although the market was generally found to be competitive, the CMA said heating oil customers are still left without many of the consumer safeguards available elsewhere in the energy sector.

Northern Ireland had the UK’s lowest heating oil prices

The CMA’s analysis also found Northern Ireland continued to record the lowest average heating oil prices among the four UK nations during the recent surge. Average prices rose from 57p per litre in February to 97p per litre in March, an increase of 39p per litre.

By comparison, Scotland recorded the highest average price at 113p per litre, while Wales reached 106p and England 103p.

The regulator said Northern Ireland’s lower prices are largely due to the high concentration of oil-heated homes, which reduces delivery costs and supports stronger competition between suppliers.

New protections proposed

The watchdog is recommending a proportionate regulatory system that would require heating oil suppliers to meet minimum standards.

These would include clearer rules on how prices are quoted, how cancellations are handled, access to independent dispute resolution if complaints cannot be resolved, clearer information on payment plans and minimum order sizes, and the creation of a register to help identify and support vulnerable households.

The CMA has also called for a review of minimum order rules to make it easier for customers to buy smaller quantities of heating oil where needed.

For Scotland, it has suggested introducing a price comparison tool similar to the Consumer Council for Northern Ireland’s existing heating oil price checker.

Customers left out of pocket

Alongside the market study, the CMA investigated reports that some suppliers cancelled customer orders after prices surged.

It estimates around 1,700 households may have been affected by possible breaches of contract.

Although customers received refunds, many were forced to reorder fuel at much higher prices, leaving some between £150 and £350 worse off.

Following discussions with the regulator, several suppliers have agreed to compensate affected customers or honour their original orders at the agreed price.

However, not all companies have agreed to do so, and the CMA says it is preparing court action against firms that refuse to provide compensation voluntarily.

Calls for fair treatment

Sarah Cardell, Chief Executive of the CMA, said heating and hot water are essential services and consumers deserve greater protection when markets come under pressure.

“Heating our homes and having reliable hot water are basic needs. While the home heating oil market is generally competitive, that is not enough to ensure good outcomes for all.

“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.”

She added that the regulator would continue pressing suppliers to compensate customers whose orders were cancelled during the recent disruption and would pursue enforcement action where necessary.

Political reaction

Responding to the report, Ulster Unionist Deputy Leader and economy spokesperson Diana Armstrong MLA said the recommendations represented “a positive step forward” for consumers in Northern Ireland.

She said:

“Northern Ireland households are heavily reliant on home heating oil, yet consumers have long lacked many of the protections available in other parts of the energy sector. I welcome the CMA’s recognition of these gaps and its recommendation for stronger safeguards.

“This is an encouraging outcome for consumers and shows that raising concerns on behalf of the public can make a difference. While the market has many strengths, it is right that vulnerable customers are better protected and have access to proper redress when things go wrong.

“Regulation is only one part of the picture. With fuel poverty remaining a pressing issue right across Northern Ireland, this must sit alongside continued investment in schemes such as NISEP, so that households – particularly those in rural areas reliant on oil – see real and lasting reductions in their energy costs.”

The CMA will now work with governments, regulators and the heating oil industry to consider how its recommendations can be implemented while continuing efforts to secure compensation for affected customers.