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Government support for the cost of heating oil

A Westminster Hall debate has been scheduled for 9.30am on 15 April on government support for the cost of heating oil. The debate will be opened by Steff Aquarone MP.

Heating oil is an alternative fuel that is used to heat homes and buildings that aren’t connected to the gas grid. It is produced from crude oil.

Where in the UK do people use heating oil?

The number and proportion of homes which use heating oil varies throughout the UK, with greater concentrations in rural areas. Based on data from the 2021 and 2022 censuses:

• In Northern Ireland, 49.5% of households used heating oil as their sole source of heating. This increases to 62.5% when considering households that used heating oil for some of their heating (that is, in combination with another source).
• In England and Wales, 3.5% of households used heating oil as their sole source of heating.
• In Scotland, 5.1% of households used heating oil as their sole source of heating.

Are heating oil markets regulated?

Heating oil prices aren’t regulated by Ofgem and aren’t covered by the energy price cap. This is because the energy price cap was implemented following the Competition and Markets Authority (CMA) Energy market investigation between 2014 and 2016, which found that there was weak competition between suppliers of electricity and gas through the grid. In comparison, the Office of Fair Trading investigation into Off-Grid Energy (PDF) in 2011 found that the heating oil market was generally working well with suppliers actively competing on price.

The government has said that introducing a price cap on heating oil risks negative unintended consequences and could drive suppliers out of the market if wholesale prices rose above the cap. The previous government set out a similar position.

What affects the cost of heating oil?

As a fossil fuel product, the cost of heating oil in the UK is influenced by international fossil fuel markets. The price of heating oil has increased during March 2026 due to the impact of the US/Israel-Iran conflict on international fossil fuel markets. The conflict has disrupted the transit of crude oil through the Strait of Hormuz, a key shipping route which accounts for 25% of the world’s seaborne oil shipments, which has caused fossil fuel prices to increase globally.

Between the end of February and mid-March 2026:

• Data published by BoilerJuice, a heating oil supplier, indicated that the average price of home heating oil in the UK increased by over 100%, from approximately 60 pence per litre (ppl) to over 120 ppl.
• Data published by Northern Ireland’s Consumer Council indicated that the average price of home heating oil in Northern Ireland increased by approximately 85 to 95%.

Government support for households using heating oil

On 16 March 2026, the UK Government announced £53 million in funding to support low-income households who rely on heating oil to heat their homes. This funding will be divided between the four regions of the UK:

• £23 million has been allocated to England.
• £17 million has been allocated to Northern Ireland.
• £4.6 million has been allocated to Scotland. The Scottish Government has also announced an additional £5.4 million in funding.
• £3.8 million has been allocated to Wales.

Separately, the UK Government has written to the UK and Ireland Fuel Distribution Association to set out its expectations of the sector and the CMA has launched a review into breaches of consumer law in the heating oil market and a Heating Oil market study. Based on the outcome of the CMA’s investigations, the UK Government says it may introduce new consumer protections for the domestic heating oil market.

When the price of heating oil increased in 2022 as a result of Russia’s invasion of Ukraine, the previous government provided support for the cost of heating oil via:

• The Energy Bills Support Scheme (EBSS), including the EBSS Alternative Fund: a one-off £400 payment to households to help with bills over winter 2022–23
• Alternative Fuel Payments (AFPs), including the AFP Alternative Fund and the Non-Domestic AFP: a one-off payment for households (£200) and non-domestic customers (at least £150) who are not on the mains gas grid and use an alternative fuel (such as heating oil) for heating.