Heating oil customers who had their orders cancelled and prices raised when the US-Israel war with Iran broke out will get compensation, the Competition and Markets Authority (CMA) has announced. Some 1,700 households were forced to "re-order at significantly higher prices or go without fuel," costing them up to £350, the CMA said. The regulator has secured agreement from some suppliers to compensate customers and is preparing legal action against those that have so far refused.
Price Surge and Market Impact
Wholesale oil prices jumped from around $70 a barrel at the start of the Iran war in February to almost $120 a barrel by the end of March, as the conflict disrupted transportation and production of energy in the region, according to the BBC. UK heating oil retail prices also surged; the CMA said on Wednesday that "average retail prices were, at their peak, 92% higher." However, the CMA's investigation found that the price increases largely reflected rising wholesale costs and that suppliers have not profited materially from the crisis.
| Metric | Value |
|---|---|
| Wholesale oil price (Feb 2026, start of Iran war) | ~$70/barrel |
| Wholesale oil price (end of March 2026) | ~$120/barrel |
| UK heating oil retail price peak increase | 92% higher |
| Households affected | 1,700 |
| Maximum cost to affected households | £350 |
Regulatory Findings and Compensation
The CMA concluded that heating oil customers are not as well protected as those connected to the energy grid. It has recommended new regulations over how prices are quoted and cancellations are handled, as well as "better support for vulnerable consumers." The regulator did not disclose how many suppliers have agreed to compensate customers, how many customers will receive a payout, or the total amount. However, it stated: "Those who paid more to replace their cancelled order will receive a payment covering the difference, while those who did not buy replacement oil will have their original orders honoured at the agreed price." The CMA added that it is "preparing to take court-based enforcement action against firms that fail to compensate customers voluntarily."
[We are] preparing to take court-based enforcement action against firms that fail to compensate customers voluntarily. — CMA
Industry and Government Responses
The UK and Ireland Fuel Distribution Association (UKIFDA), which represents heating oil suppliers, acknowledged "there were a small number of cases found which require redress." UKIFDA chief executive Ken Cronin said: "We will work with all government bodies on the recommendations set out in this report." Chancellor Rachel Reeves responded: "It is reassuring to know it is a competitive market but the lack of protection for these households does concern me so we will look very seriously at what can be done." The BBC noted that some 1.5 million households depend on heating oil, most of them in Northern Ireland, where 60% of households rely on it.
Customer Experience
Anthony Maines, 31, from Seaton Delaval in Northumberland, told the BBC he had paid £463.83 for 700 litres of heating oil on 28 February through a broker, after seeing the US and Israel first attacked Iran. The order was cancelled a few days later, and he was forced to reorder 500 litres for around £700 through a different broker. He said he locked in the cheaper price because he predicted the war would cause prices to rise.
Outlook and Regulatory Changes
The CMA's report follows a four-month investigation launched in March. The regulator has not specified when the compensation scheme will begin, but the BBC understands more details will be provided once it is operational. The recommended regulations aim to improve price transparency, cancellation policies, and protections for vulnerable consumers. The government has indicated it will consider the recommendations seriously.
Sources:
