The UK's Competition and Markets Authority has recommended stronger regulation of the heating oil market following an investigation, but will not impose the sort of price caps applied to gas and electricity supplies. The CMA investigated heating oil markets across Northern Ireland and other parts of the UK, concluding that consumer protections need to be strengthened. The watchdog identified the need for better support for vulnerable households and more formal ways for customers to resolve disputes with suppliers.
Northern Ireland's Economy Minister Caoimhe Archibald said she will implement the CMA's recommendations. She told lawmakers that the changes being announced are proportionate and will improve existing consumer protections at minimal extra cost. The new measures include a mandatory code of conduct for heating oil suppliers and an enhanced role for the Consumer Council in helping consumers settle disputes. The Consumer Council will also lead the creation of an opt-in register for households identified as vulnerable.
About two-thirds of Northern Ireland households rely on home heating oil for warmth, the highest proportion of any UK region. In March, at the start of the US-Israel conflict with Iran, heating oil prices in Northern Ireland jumped by 92% in a single month, the largest monthly spike on record. This surpassed the previous record rise of 59% in March 2022 following Russia's invasion of Ukraine. The CMA's analysis found that price increases were even steeper in Scotland and Wales, where heating oil tends to be used in remote rural locations. By contrast, Northern Ireland generally saw lower prices overall because it has a competitive range of suppliers and a market large enough to keep delivery costs down.
The CMA attributed the sharp price spike during the Iran conflict largely to rising wholesale costs rather than market failures. The watchdog concluded that price controls would be counterproductive and declined to recommend them as a solution. This means households and businesses using heating oil will see their bills respond to global market conditions rather than being shielded by regulatory price caps like those protecting gas and electricity users.