UK households using heating oil are feeling the pinch of increased costs due to the ongoing conflict in the Middle East. Approximately 1.5 million households rely on heating oil, a fuel not protected by the Ofgem price cap that regulates energy costs.
The End Fuel Poverty Coalition has noted a significant surge in heating oil prices, reaching levels reminiscent of the early days of the Ukraine invasion. Some consumers have reported a substantial increase in the price of 1,000 litres of heating oil, now costing nearly £985 compared to £670 in January.
Simon Francis, coordinator of the End Fuel Poverty Coalition, highlighted the challenges faced by households dependent on heating oil, emphasizing the lack of protection under the current energy price cap. With oil prices soaring due to international conflicts, these households are experiencing a sudden spike in heating expenses.
Financial expert Martin Lewis has also raised concerns about the situation, pointing out the vulnerabilities of those relying on heating oil and the limitations of current market solutions. Oil prices have risen following disruptions in shipping through the Strait of Hormuz, with Brent Crude Oil reaching around $87 per barrel.
Energy suppliers are adjusting tariff deals in response to market changes, and while the new Ofgem price cap is set to decrease from £1,758 to £1,641 per year for a typical dual fuel household starting April 1, experts anticipate a subsequent increase of around 10% from July, driven by higher gas prices.
Analysts predict a rise in Ofgem’s price cap for July to September to £1,801 a year, subject to fluctuations in wholesale prices influenced by the duration of the Middle East conflict. The final price cap determination will be based on average wholesale prices over a three-month period.