Government’s heating oil plans a step in the right direction, MP says
THE UK Government planning to protect heating oil users has been hailed as a potentially “significant moment” by Northern Isles MP Alistair Carmichael.
However, he has called on ministers to set out when the new rules will come into effect.
The government announced this morning (Tuesday) that households on heating oil will benefit from better protections under government plans to regulate the market for the first time, accepting recommendations made by the Competition and Markets Authority’s (CMA).
This aims to formalise the standards consumers should expect from their suppliers, protect vulnerable households from harm and give people clearer routes to compensation.
Industry practices setting minimum order volumes at 500 litres will also be reviewed.
The news follows a significant price spike in energy, including vehicle fuel and heating oil, following the US war on Iran earlier in the year, with prices more than doubling for some customers and allegations of suppliers cancelling orders in order to charge a higher price.
Speaking in the House of Commons, Carmichael said: “Can I welcome the announcement today about the government’s intention to regulate the market in heating oil for communities like mine, completely off the gas grid, with the highest levels of fuel poverty in the country?
“This could be a significant moment. What my constituents would like to know, however, is when they might see this proposal become an implemented reality.”
Responding for the government, the parliamentary under-secretary of state for energy consumers Polly Billington said: “I think it’s important to make it quite clear what kind of proposals we’re considering taking forward.
“We will work with the industry to strengthen consumer protections in the code of conduct and we will review industry practices which currently set minimum order volumes at 500 litres for some customers.
“We’ll raise the awareness of payment plans to make sure customers have the right options available to them.”
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Speaking afterwards, Carmichael said the minister “answered almost every question that could be asked about the government’s plans to regulate the heating oil market – except the question that I actually asked”.
“I am glad that ministers are taking vulnerable heating oil customers more seriously but it is vital that we know exactly when they intend to act, given that winter is fast approaching,” he added.
“This is a first step towards better protection for heating oil customers but it is not enough on its own.
“The government needs to consider stronger measures like a price cap, such as exists for gas and electricity – and broader action to make sure that those of us who do not have access to the gas grid do not lose out as a result.”
Responding to the CMA analysis, the UK Government said it recognises the “individual challenges faced by households that depend on heating oil, including those in remote and rural areas, and those with limited ability to switch quickly to alternative forms of heating”.
It also said it recognised that many suppliers operate in “demanding conditions and that any approach to strengthening the market must be proportionate, practical, and evidence-based”.
The government said it is not proposing “simply to replicate the gas and electricity price cap for heating oil – instead, the government’s focus is on targeted financial support for those most at risk, continued monitoring of supply and pricing, and proportionate consumer protections”.
A spokesperson for the End Fuel Poverty Coalition said that bringing heating oil under “proper regulation is a step in the right direction for rural households who have been left to fend for themselves every time global oil prices spike”.
More information on the recommendations from the CMA, and the government’s response, can be found here.
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