Chancellor Rachel Reeves has announced a £50 million support package for low-income and vulnerable households reliant on heating oil, as prices continue to surge following the conflict in the Middle East.
Kerosene, the fuel used in heating oil systems, has risen sharply in recent weeks, outpacing increases in petrol and mains gas. Unlike gas and electricity, heating oil is not covered by the energy price cap. This leaves off-grid households exposed to sudden price spikes, often requiring large upfront payments to refill tanks.
The Government will distribute the funding through local councils from 1 April, using the new Crisis and Resilience Fund (CRF). The allocation reflects regional demand, with £27m for England, £17m for Northern Ireland, £4.6m for Scotland, and £3.8m for Wales. Northern Ireland is particularly affected, with up to 60% of homes relying on heating oil.
Ministers have acknowledged that many vulnerable households face significant financial pressure due to the need to pay lump sums to maintain heating and hot water.
Alongside the financial support, the Government has launched a wider review of the heating oil market. Plans include introducing sector-wide regulation for the first time, improving consumer protections, and working with suppliers to enhance service standards.
The Competition and Markets Authority is also investigating the market to identify any excessive pricing. Further proposals include appointing a formal regulator, potentially Ofgem, and establishing an ombudsman under the forthcoming Energy Independence Bill.
Talk to us about your finances.
