Rural heating oil customers offered compensation after cancelled orders
Find out what the latest Competition and Markets Authority review means for rural households affected by volatile fuel prices and supplier cancellations
The Competition and Markets Authority (CMA) has announced that, following a review of the impacts of the current Middle East conflict, compensation should be made available for heating oil customers who have had orders cancelled.
The majority of the 1.5m households who rely on heating oil are in rural areas. Ever since the start of the Iran-US conflict, the heating oil market has been extremely volatile with orders being cancelled at no notice.
How have heating oil customers been affected?
Now the CMA has said that around 1,700 customers were affected by possible breaches of contract. Whilst these people received refunds for their original order, many had to re-order at significantly higher prices or go without fuel at all.
This has meant some people may have had to pay between £150-350 more for their heating oil. Following CMA intervention, a number of suppliers have agreed to compensate affected consumers. Those who paid more to replace their cancelled order will receive a payment covering the difference, while those who did not buy replacement oil will have their original orders honoured at the agreed price.
But, not all affected suppliers have agreed to compensate and the CMA is preparing to take legal action against those suppliers that fail to compensate customers voluntarily.
What next for heating oil customers?
Although the CMA review shows that there has been no explicit price gouging, it has recommended that there should be a new proportionate regulatory regime which would cover how prices are quoted (which needs to be far more transparent), how cancellations are handled and better support for vulnerable consumers.
As part of its analysis of the macro-economic effects of the crisis, the CLA has been monitoring the heating oil price for both England and Wales. As would be expected, the costs of supplying those in remote rural areas are higher but the gap between the Wales price and the lower England price (usually around 5p per litre) has narrowed over the last couple of weeks.
However, although there were hopes that the conflict would soon be resolved after the ceasefire was announced, the recent retaliatory strikes over the last week clearly indicates that the impacts on the global economy will continue.
