My hon. Friend the Minister for Energy Consumers (Polly Billington) made the following Statement today:
Today, I am publishing the Government's response to the Competition and Markets Authority's (CMA) market study into the heating oil sector.
For the first time, families who rely on heating oil will benefit from stronger protections under Labour Government plans to regulate the sector for the first time. This Government is committed to protecting households from volatile global fossil fuel markets. Homegrown power we control is the only way to lasting energy security and lower bills. While the Government cannot prevent global price shocks, including those driven by the Middle East crisis, consumers must be treated fairly and supported when markets come under pressure. This includes the 1.5 million households across the UK who rely on heating oil to heat their homes, many of them in rural and off-grid communities, who currently lack many of the protections available to other energy users.
We are grateful for the CMA’s swift action to investigate and the publication of their report in July. While the CMA found that recent increases in heating oil prices were largely driven by higher wholesale costs rather than a lack of competition or excessive profits, it identified clear gaps in consumer protections, compared with those available to gas and electricity users. These include weaker rights when things go wrong, limited access to redress and dispute resolution, less price transparency and less support for vulnerable households. Today I can confirm that this government is taking forward proposals to regulate the heating oil sector for the first time. We will strengthen consumer rights and ensure a fairer deal for off-grid households.
We will take forward a programme of reform to establish a stronger consumer protection framework for households. Working with Ofgem, the devolved governments and industry and consumer representatives, we will develop options for proportionate regulation that puts consumer rights at its core, while supporting competition, investment and security of supply. This will be underpinned by a robust evidence base, extensive engagement and the appropriate legislative framework.
In practice, this means consumers can expect stronger rights, clearer standards, better support for vulnerable households and easier access to redress when things go wrong. These actions build on the issues faced by thousands at the start of the Middle East crisis when their heating oil orders were cancelled, forcing them to re-order and pay more.
Getting this approach right will take time, to ensure the best outcomes for consumers. In the meantime, we will take practical steps to strengthen consumer protections without delay. Working across government, Ofgem and with industry and consumer groups, we will seek improvements to existing codes of practice, promote access to existing appropriate dispute resolution mechanisms, and increase consumer awareness of available support.
We will also examine areas where consumers may face barriers, to help with affordability and transparency issues. This will include considering minimum order volumes, access to smaller deliveries and payment plans, as well as whether further action is required to improve price transparency. Intervention will be considered where there is a clear case to improve consumer outcomes, while avoiding unnecessary burdens where markets are functioning effectively.
Today’s announcement is the next major step in our commitment to improve the heating oil market. It builds on the swift action this Government has already taken –over £50m of financial support to help with the cost of heating oil, and we are helping thousands of households on heating oil switch to clean heat with grants worth £9,000.
Our aim is simple: a fairer, more resilient and trusted heating oil market which prioritises consumer protections, while preserving competition and security of supply. Our response combines practical action now with a clear path towards stronger, proportionate protections for the future.
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