UK households with heating oil will receive compensation payments of up to £350 each after the government stepped in following 'breaches of contract' by companies during the recent price surge.
Price surge and cancellations
The cost of heating oil shot up earlier this year following the US's attacks on Iran, with many customers facing sudden cancellations for orders, or forced to reorder at a higher price point.
The government's Competition and Markets Authority (CMA) has now intervened over cancelled orders which it says may have been a breach of contract.
Compensation secured from suppliers
The CMA says it has secured compensation from suppliers after finding that hundreds of customers who ordered through an intermediary site were impacted.
While customers received refunds for their original orders following cancellations, many had to buy replacement oil at significantly higher prices, while others went without the essential fuel.
The CMA estimates customers may have paid between £150 and £350 more for replacement heating oil.
Payments and next steps
Following CMA intervention, customers whose suppliers have joined the compensation scheme, and who paid more for replacement oil, will receive a payment covering the difference between the original and replacement order. Customers who did not purchase replacement oil will have their original order honoured at the agreed price.
Eligible customers do not need to do anything and either have been, or will be, contacted directly – around 800 customers have already been notified. Those seeking compensation for replacement purchases will need to provide evidence of their replacement order, such as a receipt and delivery note.
The CMA will continue to work with suppliers to finalise compensation arrangements and ensure affected customers receive the payments they are due.
Sarah Cardell, Chief Executive of the CMA, said: “Heating oil isn’t a luxury, it’s a necessity that many people rely on to have hot water and warm homes.
“During the price spikes earlier this year, hundreds of customers were left out of pocket or without fuel after their orders were cancelled. That’s why we’ve pressed suppliers to put it right.
“They’ve now agreed to compensate those affected by issuing compensation or honouring their original contracts.”
