UK households using heating oil are feeling the pinch of increased costs due to tensions in the Middle East. Approximately 1.5 million households rely on home heating oil, which is 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 comparable to those seen during the early stages of the Ukraine conflict. Some customers are reporting a steep increase in the price of heating oil, with 1,000 liters now costing nearly £985, up from £670 in January.
Simon Francis, coordinator of the End Fuel Poverty Coalition, emphasized that households using heating oil are particularly vulnerable to price spikes as they often face challenges in making energy-efficient home improvements. While other households are shielded by the energy price cap, those reliant on oil heating are experiencing immediate financial strain and may require urgent assistance.
Financial expert Martin Lewis has also cautioned individuals dependent on heating oil, highlighting the lack of regulation and protection in the current market. Oil prices have risen following disruptions in shipping through the Strait of Hormuz, with Brent Crude Oil reaching around $87 a barrel.
Energy suppliers are withdrawing fixed-price tariff deals, indicating a reduction in options for consumers. Despite a forthcoming drop in energy prices from April due to the revised Ofgem price cap, experts anticipate a subsequent increase of around 10% from July, largely driven by higher gas prices. Analysts project a surge in the price cap to £1,801 per year for the period of July to September, reflecting the impact of ongoing global conflicts on energy markets.
The final price cap determination will be influenced by average wholesale prices over a three-month period, contingent on the duration of the Middle East conflict.