UK Government Unveils £53m Support Package For Rising Heating Oil Costs
UK Prime Minister Keir Starmer has announced a £53 million support package aimed at helping vulnerable households cope with soaring heating oil prices.
The funding will be targeted at low-income households, particularly those in rural communities where heating oil is widely used. Local councils will be responsible for determining eligibility and distributing the funds.
The move comes amid a sharp rise in heating oil costs, with some households reporting that prices have doubled since the outbreak of the US–Israel–Iran conflict. The situation has prompted the Competition and Markets Authority to launch an investigation into reports of price spikes and supply issues.
Unlike gas and electricity, heating oil prices are not regulated by Ofgem, leaving households more exposed to market fluctuations. Around 1.5 million homes across the UK rely on heating oil, with usage particularly high in Northern Ireland.
In England, the support will be distributed through the Crisis and Resilience Fund, which replaces the temporary Household Support Fund from April 1. Funding will be allocated based on the number of heating oil users in each area, with priority given to households at immediate risk of losing access to heating and hot water.
Other parts of the UK will receive direct allocations, including £17 million for Northern Ireland, £4.6 million for Scotland and £3.8 million for Wales.
Reacting to the announcement, Northern Ireland’s First Minister Michelle O’Neill criticised the funding as insufficient, describing it as inadequate for the scale of the crisis.
The government also said it is exploring new consumer protections for heating oil users, as the sector currently lacks formal price regulation. Authorities have warned that companies could face legal action if they are found to be manipulating prices.
According to the UK Fuel Distribution Association, heating oil prices are closely linked to jet fuel markets in Europe. Prices have surged due to disruptions in global supply, particularly around the Strait of Hormuz, a key shipping route for oil that has been affected by ongoing tensions.
The rising costs have had a direct impact on households. Some residents have reported cutting back on heating and hot water usage, while others are taking precautions to secure their oil supplies due to fears of theft.
Consumer advocacy groups, including the End Fuel Poverty Coalition, have welcomed the support but called for clearer details on how it will be implemented and who will qualify.
Opposition figures have also weighed in. Conservative politician Claire Coutinho said the government should go further, while Ed Davey, leader of the Liberal Democrats, called for a suspension of VAT on heating oil and the introduction of a price cap similar to those applied to gas and electricity.
Energy prices remain volatile, with global crude oil prices rising sharply amid geopolitical tensions. While gas and electricity bills are currently capped in parts of the UK, future price movements will depend on developments in the global energy market in the coming months.
