Heating oil compensation: Are you due £350 from cancelled deliveries?

You could be owed compensation of up to £350 if your heating oil supplier cancelled orders so that you had to pay higher prices during the energy crisis, the Competition and Markets Authority (CMA) has said.

Some heating oil suppliers could have breached their contracts by cancelling orders after wholesale prices surged following conflict in the Middle East, the consumer watchdog has found.

Customers received refunds, but many had little choice but to buy heating oil again at much higher prices, leaving some people hundreds of pounds out of pocket.

Who could be due compensation?

According to the CMA, around 1,700 households may have been affected by cancelled heating oil orders.

Customers who had their deliveries cancelled often had to buy replacement heating oil at between £150 and £350 more than they originally agreed.

In some cases, people had to go without heating oil while trying to secure another supplier.

Following discussions with the CMA, several suppliers have agreed to compensate affected customers.

If you had to buy replacement heating oil, you should receive a payment covering the extra amount you paid.

If you decided not to reorder, suppliers that have agreed to the CMA's proposals will instead honour your original order at the agreed price.

However, not all suppliers have agreed to compensate customers, and the CMA says it is preparing court action against businesses that fail to do so voluntarily.

Do you need to make a claim?

The CMA has not yet published a formal claims process.

Instead, it is working directly with suppliers to identify affected customers and arrange compensation.

If you believe your heating oil order was cancelled during the period covered by the investigation and you were forced to pay more elsewhere, it is worth contacting your supplier to ask whether your order is included.

Keep copies of your original order confirmation, refund and replacement purchase.

Who uses heating oil and why are customers less protected?

Heating oil is a fuel used to heat homes and provide hot water in properties that are not connected to the mains gas network.

It is most commonly used in rural and off-grid areas across England, Scotland, Wales and Northern Ireland, where households store the fuel in a large tank on their property and arrange deliveries from a supplier when they need to top it up.

Around 1.5 million UK households rely on heating oil. Unlike people with gas or electricity supplied through the national networks, heating oil customers usually have to buy fuel in large quantities, often paying £500 or more for a single delivery.

Because heating oil is not supplied through a regulated energy network in the same way as mains gas and electricity, customers do not benefit from many of the consumer protections available to other energy users.

For example, there are currently no consistent rules covering:

• How prices should be quoted.

• How cancelled deliveries should be handled.

• Support for vulnerable customers.

• Access to an independent dispute resolution service if something goes wrong.

The CMA says these gaps become particularly serious during periods of supply disruption or sharp price increases, when households may have little choice but to pay higher prices or wait longer for deliveries.

Will the heating oil market now change?

To help better protect people and improve outcomes, especially during periods of volatility, the CMA has made recommendations to the UK and devolved governments.

This includes for the UK government and Northern Ireland Executive to introduce a new regulations for heating oil suppliers.

The CMA said this should require suppliers to register and meet minimum standards, which include how prices are quoted, cancellations are managed and giving households access to independent dispute resolution.

This would also create a register for vulnerable households to make it easier to protect them.

It remains to be seen if the government will take the actions forward.