Scottish ministers to consider bringing in price checker for heating oil

The Scottish Government is to consider bringing in a permanent price checking tool to help those who rely on heating oil.

Energy minister Stephen Gethins made the pledge on the back of a new report from the Competition and Markets Authority (CMA) calling for increased protections for the 1.5 million plus households across the UK who use the fuel.

The report, published after the conflict in the Middle East saw a surge in the cost of heating oil – with prices at their peak 92% higher – said there should be a new, proportionate regulatory regime covering areas such as how prices are quoted, how cancellations are dealt with, and better support for vulnerable customers.

The CMA found that heating oil prices tend to be lowest in Northern Ireland, where over 60% of households rely on this form of fuel.

But it said that people in many remote areas – including parts of Scotland – generally have less choice of suppliers and face higher prices due to the higher costs of serving these areas.

Adding that there are “clear gaps in the protections available to heating oil customers compared with those connected to gas and electricity network”, the CMA said this could impact customers during “periods of volatility”.

This could see people having to pay “substantially higher prices” for heating oil, as well as facing “uncertainty” over both costs and whether their oil will be delivered as scheduled.

Around 1,700 customers in the UK were “left in limbo by some suppliers after orders were cancelled as the crisis was unfolding”, the CMA said.

It has now recommended a review of the rules and regulations around minimum order volumes, to allow people to buy smaller amounts of heating oil.

But the CMA also said consideration should be given to developing a new price checker for consumers in Scotland, based on the heating oil price tool brought in by the Consumer Council for Northern Ireland.

CMA chief executive Sarah Cardell said: “Heating our homes and having reliable hot water are basic needs. While the home heating oil market is generally competitive, that is not enough to ensure good outcomes for all.

“Stronger safeguards are needed – including regulatory oversight and better support for vulnerable consumers as well as communities living in areas of the UK that are particularly exposed to higher and more volatile prices.”

Mr Gethins welcomed the report, saying it both “illustrates the higher prices faced by Scottish households, and endorses our longstanding calls to strengthen consumer protections”.

In the wake of its publication he vowed: “The Scottish Government will consider the report’s recommendations, including the development of a permanent price checker tool, to support the action we have already taken to shield the most vulnerable households from price spikes through the Scottish Emergency Heating Oil Scheme.”

But he said: “Given the current and ongoing volatility of international events, it is critical that UK Government makes urgent progress to make market regulation fit for purpose.

“We stand ready to work with them to ensure any changes address the challenges faced by Scottish households.”

Consumer Scotland meanwhile said it “particularly” welcomed the call for a price checker tool to be developed for heating oil customers north of the border.

Director of policy and advocacy Douglas White said: “There are clear gaps in the protections available to heating oil customers compared with those connected to gas and electricity networks and we support the CMA’s recommendation to address this through regulation.

“As the CMA has highlighted, while price transparency is generally good across Great Britain, price transparency via online platforms is lower in Scotland.

“That is why we particularly welcome the CMA’s option to consider the development of a new price checker for consumers in Scotland.”

Martin McCluskey, minister for energy consumers in the UK Government, said: “I know the war in the Middle East hit households on heating oil especially hard – and I welcome the CMA’s report today identifying issues in the sector.

“It is clear that the heating oil sector is not working as it should for consumers and the report today highlights areas for improvement.”

He promised: “We will take action in response to these recommendations so we can create a fairer system for rural households across the country.

“It is welcome that the CMA are preparing to take enforcement action against firms that cancelled orders leading to people having to pay higher prices. That practice is simply unacceptable.

“We have already taken action to support vulnerable customers on heating oil, confirming over £50m in support.”