Not possible to compensate everyone hit by heating oil price hikes, says UK Government

Katrine Bussey, Press Association

Not everyone affected by heating oil price hikes sparked by the conflict in the Middle East will be able to be compensated, the UK Government has warned.

Energy consumers minister Martin McCluskey also said it would be for Andy Burnham’s incoming government to decide if regulations should be introduced for the sector.

He was speaking after a report from the Competition and Markets Authority (CMA) this week recommended strengthened protections for the 1.5 million households across the UK who rely on heating oil.

With the conflict in Iran seeing average prices for heating oil soar 92% higher at their peak, some customers had their contracts cancelled and were forced to reorder at much higher costs.

CMA chief executive Sarah Cardell said this week around 1,700 customers “were left in limbo by some suppliers after orders were cancelled as the crisis was unfolding”.

She added while some suppliers had already agreed to compensate customers, “a number of firms still have not” – with the CMA prepared to take enforcement action against these companies.

However Mr McCluskey said on Thursday: “It is not possible to provide compensation to everyone, in some cases these price increases were within contract.

“In a number of cases people have already been compensated, so some suppliers have already voluntarily compensated customers for those price increase.

“But there are still some suppliers who have not done that and that is where the CMA is now beginning the work of enforcement action to enforce those contracts that people signed.”

With Sir Keir Starmer stepping down as Prime Minister, to be replaced by Mr Burnham, the minister also stressed it is for his government to consider introducing regulations.

The CMA recommended that governments should require suppliers to register and meet minimum standards, which would cover how prices are quoted, how cancellations are managed, and access to independent dispute resolution.

Suppliers should also make clear the payment plans that are available, and create a register for vulnerable households, making it easier to help them.

The CMA also called for a review of the rules and regulations around minimum order volumes to allow people to buy smaller amounts of heating oil.

Mr McCluskey told journalists: “This is going to be an issue for the next government, once the changeover happens on Monday.

“I see no reason why the government would not take forward these recommendations, given what has been very clearly stated by myself, the Prime Minister and others, about the need for regulation in this sector.

“The CMA have made an incredibly strong case in their report for regulation for heating oil.”

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