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Heating oil prices surge as conflict pushes up energy costs for off-gas homes

The cost of heating oil continues to surge due to the Middle East conflict, now hitting levels not seen since the early days of the Ukraine invasion. Reports from some customers suggest that 1,000 litres now costs almost £985, compared to £670 in January.

During the height of the last price spike, the government recognised that off-gas-grid homes were exposed to fuel price spikes and weren’t covered by the Energy Price Guarantee, so it introduced the separate Alternative Fuel Payment – a £200 one-off payment for households using fuels such as heating oil, LPG or biomass.

A spokesperson for the End Fuel Poverty Coalition, said

“Households that rely on heating oil are often some of the most exposed to global fossil fuel price shocks because they sit outside the energy price cap.

“These homes are also those that are among the deepest fuel poverty as the cost of home improvements which could help reduce the cost of energy can be prohibitive.

“This means that when overseas conflicts send oil prices soaring, the cost of heating for families in rural and off-grid homes can jump almost overnight.

“While other households are protected by the energy price cap for now, homes heated by oil are starting to suffer now and may need urgent support.

“This is another harsh reminder that relying on volatile fossil fuel markets leaves households vulnerable. The long-term answer has to be looking at alternative heating systems and creating warmer homes by supporting people who need to improve energy efficiency.”

Meanwhile early signs suggest energy suppliers are once again increasing exit fees on fixed tariffs.

These charges, which households must pay if they leave a fixed deal early, surged during the last energy crisis as suppliers tried to protect themselves from volatile wholesale markets. In some cases exit fees climbed to more than £100 per fuel, making it expensive for households to move supplier even when cheaper deals became available.

Campaigners warn the same pattern could now be repeating. If exit fees rise again, households who fix their tariff to gain certainty could find themselves stuck in poor value deals or tied to suppliers providing weak customer service, simply because the cost of leaving becomes too high.

A spokesperson for the End Fuel Poverty Coalition told the Telegraph:

“Every time the global gas market starts to spike, exit fees creep up. What should be a simple choice about fixing your bill risks becoming a trap that locks households into expensive deals or with poor customer service. Ofgem should act quickly to implement an exit fee ceiling to help protect consumers.”

Energy bills set to rise again in summer as global gas tensions bite

As conflict in the Middle East continues and Qatari production of LNG gas unlikely to restart soon, analysts at Cornwall Insight expects that energy bills will increase from 1 July by 10% to around £1,800 for the average household.

Members of the End Fuel Poverty Coalition predict that this will be at the lower end of predictions, if the conflict is not resolved in the coming days. After falling back from early morning extreme highs during trading yesterday, gas prices are sitting 26% up year-on-year (as at 0930 5 March).

A spokesperson for the End Fuel Poverty Coalition commented:

“The latest projections are devastating for households who had been expecting some relief on energy bills.

“Summer normally brings some respite for households because wholesale prices tend to ease as heating demand falls. So the prospect of bills rising by around 10% in July is a worrying sign that global tensions are once again feeding directly into energy costs.

“If these forecasts prove correct, the increase would wipe out the savings delivered by the Budget and pile even more pressure onto families already struggling. Energy debt is already at record levels, and millions of people remain in cold, damp homes after years of high bills.

“The deeper problem is that the UK is still dangerously exposed to volatile fossil fuel markets. As long as our energy system remains tied to global gas prices, shocks like this will continue to hit household finances.

“At the same time the energy industry stands to benefit from the crisis. It’s obscene that as bumper profits are predicted from the fresh energy crisis, some are calling for an early end to the Windfall Tax.

“Ministers must ensure the system works for consumers, not just for the fossil fuel giants, and deliver more homegrown renewables, better insulated homes and fairer energy pricing.”

Scottish Ministers step up attacks on energy Windfall Tax

The debate over the UK’s windfall tax on oil and gas companies has reignited after Scotland’s First Minister called for the levy to be scrapped. He joins his Scottish Government colleagues in putting pressure on UK ministers after lobbying from the energy industry.

Citing uncertainty caused by conflict in the Middle East, John Swinney said the Energy Profits Levy is harming investment and jobs. But with global gas prices rising again (57% increase month on month as per market data at 1400 on 4 March) and energy companies continuing to post strong profits, campaigners argue weakening the tax would not help households already struggling with high bills.

A spokesperson for the End Fuel Poverty Coalition, commented:
“Conflict in the Middle East and rising global gas prices show exactly why the Windfall Tax remains necessary, not why it should be scrapped. When geopolitical tensions push up prices, energy companies and their shareholders benefit while households face another round of higher bills from 1 July.

“Energy firms have made tens of billions in UK profits in recent years even with the Energy Profits Levy in place, so the idea that removing it will suddenly make energy cheaper or more secure simply doesn’t stand up. The North Sea is declining because of the geology of an ageing basin, not because companies are paying a fair share of tax.

“Instead of handing the industry a tax break, governments should be using these revenues to cut bills, tackle energy debt, support workers through the transition and invest in warm homes and clean energy so households are protected from exactly this kind of global price shock.”

Politicians debate Spring Statement as energy risks still loom

Chancellor Rachel Reeves used her Spring Statement to defend the Government’s economic plan after the Office for Budget Responsibility downgraded near-term growth forecasts.

But against a backdrop of rising tensions in the Middle East and renewed volatility in global energy markets, the statement did nothing to reassure households.

A spokesperson for the End Fuel Poverty Coalition, said

“Away from the hot air generated by politicians in Westminster today, households will be watching the news to see how the latest conflict hits their energy bills.

“Time and again we see how global tensions push up fossil fuel prices, driving costs higher and squeezing living standards. Yet while families face that uncertainty, energy giants have generated more than £125bn in UK profits since 2020.

“The Chancellor is right in her Spring Statement that the world has become more uncertain, with one of the biggest risks to family finances being the over-exposure to volatile oil and gas markets.

“If the Government is serious about tackling the cost of living and strengthening economic resilience, it must accelerate investment in homegrown renewables, roll out a nationwide insulation programme and reform energy pricing so bills are no longer tied to fossil fuel volatility.

“In an unstable world where the UK’s own gas fields will not be able to meet demand in the years to come, energy security and affordable energy are two sides of the same coin.”

Iran conflict pushes gas prices higher, but the risk for bills lies ahead

Gas wholesale prices have now hit levels not seen since 2023 (as at 09:00 3 March 2026 they were at levels last seen on 30 January 2023, up 36% year-on-year) and the cost of heating oil is also surging (up 39% year on year).

A spokesperson for the End Fuel Poverty Coalition, said:

“Global price shocks translate into higher energy costs because the UK remains so heavily dependent on gas and the mature North Sea basin will be unable to meet domestic demand within the next few years. Our energy system also links the cost of gas to electricity prices because the grid still relies on gas-fired power stations, although this influence eased last year.

“The conflict has already started to push wholesale gas prices to levels we’ve not seen since 2023, but for now most households are shielded by the Ofgem price cap.

“Bills are effectively protected until at least 1 July 2026 because the April to June cap has already been set. The cap works by smoothing out price spikes and delaying the passing on of cost increases to consumers. But that also means the real risk is what happens next.

“If wholesale prices fall back, the impact may be limited. But if elevated prices persist, they will affect Ofgem’s next price cap decision in May, which takes effect from July.

“It is also unclear how suppliers will respond in the fixed tariff market. In periods of uncertainty they often withdraw or increase the price of deals to avoid exposure to volatile wholesale costs.

“Households that rely on heating oil are even more exposed, and the latest surge in those prices will be a major concern for rural and off-grid families needing to refill in the coming weeks.

“This is a stark reminder that the UK is still dangerously exposed to volatile international markets. The only lasting protection for households is to cut gas demand through a nationwide insulation programme, expand homegrown renewables and reform energy pricing so bills are no longer tied so closely to global fossil fuel prices.”

Gas and heating oil prices spike as energy risks mount

The UK Natural Gas price has just hit a 12 month high and is still rising fast (as of 1300 GMT it is 13% up on 2025) as Qatar suspends LNG gas production and exports.

This will impact the energy price cap which takes effect on 1 July 2026. Heating oil is also at a 12 month high – 30% up year on year, which will be a concern to rural communities.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Fresh highs in wholesale gas prices underline that UK households remain dangerously exposed to volatile global markets and that the UK’s own gas is running out. Within a few years we will no longer be able to meet heating demand from the North Sea, leaving families even more exposed to price shocks from abroad.

“As long as our energy bills remain dependent on gas, households will keep being hit by global price shocks. The most durable way to protect people is to cut demand through a nationwide insulation programme, invest in homegrown renewables and reform energy pricing so bills are no longer tied to volatile fossil fuel markets.

“At the same time, energy share prices are surging again. With industry lobbying the Treasury to end the Windfall Tax early, there is a real danger the crisis once again becomes a cash machine for the energy giants.

“Ministers must reject industry pressure and remember that a handful of energy firms have generated more than £125bn in UK profits since 2020.”

Energy debt rises to £5.5bn with further increases expected

A new report by Energy UK has revealed the scale of household energy debt, which has more than doubled over the last three years to reach £5.5 billion.

Arrears now represent around 75% of all unpaid energy bills, meaning there are no repayment plans in place for the majority of this debt, while over one million households currently have no registered details with suppliers, increasing the risk of unmanaged debt.

A spokesperson for the End Fuel Poverty Coalition, said:

“Energy debt has risen for one simple reason: energy bills have remained far higher than household incomes can sustain. This is not a story of widespread ‘won’t pay’ behaviour, it is overwhelmingly about people who simply cannot afford the bills landing on their doormats.

“The real level of financial stress in households in energy debt is likely to be even higher when you factor in people juggling credit cards, borrowing from family, or self-disconnecting on prepayment meters to avoid falling into formal arrears.

“We know from our research in 2024 that households in energy debt also turn to loan sharks due to the cost of energy.

“The human impact is severe. If debts continue on their current trajectory towards £7bn by 2027, we risk locking millions of families into a permanent cycle of fuel poverty.

“It is also increasingly hard to justify a system where the costs of unrecoverable debt are routinely added onto the bills of those who do pay. As Ofgem persists with a methodology that has failed, the energy industry keeps on reporting billions of pounds in profits.

“The priority should be preventing debt building up in the first place. That means urgent progress on debt relief, fairer standing charges, a social tariff for those on the lowest incomes, and a major programme of home energy upgrades to bring bills down for good.”

Energy bills set to fall 7% from 1 April under Ofgem price cap

Ofgem has announced that the average household energy bill will fall by 7% from 1 April 2026.
The impact of the year-on-year changes could see the number of households paying more than 10% of their income on energy fall from 13.2m to 11.2m.
However, the changes will see energy bills remain £599 (57%) above winter 2020/21 and £73 (5%) above what they were on 1 July 2024.
Significant changes to unit costs and standing charges will take effect from 1 April 2026 and initial analysis suggests some households will see much bigger reductions than others.
A low usage household will see their bill reduce by around £80, while high usage households might see a £140 saving.
Using data from Scope and Mencap, the End Fuel Poverty Coalition has calculated that those reliant on energy for disability or health needs could see even greater savings, but will still experience a 64% ‘energy poverty premium’ with a typical bill much higher for these groups.
It remains unclear when and how energy firms will start to reflect these changes in the rates they advertise. The Government is expected to make a further announcement next month.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said:
“Government decisions are starting to make a difference and today’s fall in the price cap will bring some welcome relief to households who have been under intense pressure from high energy costs.
“But, of course, bills remain hundreds of pounds above pre-crisis levels and for millions of families in cold, damp homes this will not feel like the cost of living crisis is over. If the country is going to tackle energy affordability for good, this must be the start of deeper reform, not the end of the job.
“That means bearing down on excessive market trading costs, dealing with the growing mountain of energy debt, taking a hard look at how infrastructure costs are recovered from households and doing more work to reduce exposure to volatile gas prices.
“At the same time, the energy industry and its ultimate owners, including hedge funds and overseas investors, must continue to face scrutiny for the healthy profits made at the expense of households
“With the changes to both unit rates and standing charges still working through the system, consumers may need to be cautious about rushing into fixed deals right now. Bill payers may want to wait for the dust to settle and carefully check their specific usage to ensure any switch delivers the maximum savings.”
Hannah Wall, Community Heat & Energy Lead at climate charity Possible, said:
“Lowering the energy price cap by removing levies from customers’ bills is a welcome step forwards to support people who have been struggling with high bills. But far too many people are still living in energy poverty, and face impossible choices to keep their homes warm.
“Energy bills remain significantly higher than they were before the energy crisis, driven by soaring gas costs. The structure of our energy system still leaves us exposed to volatile fossil fuel prices. It’s unfair that our electricity bills continue to be tied to global gas markets, creating a distortion that makes it harder for people to switch to clean electric heating, which should be cheaper than dirty gas.
“We need faster action from the government to deliver promised reforms to the electricity market to ensure everyone can afford a warm home powered by clean, climate-friendly heat and energy.”
Independent Age chief executive Joanna Elson, CBE, said:
“Today’s energy price cap announcement will provide some brief respite for the older people in financial hardship, as a typical household energy bill is dropping by almost seven per cent to £1,641 from April.
“However, energy bills are still extremely high, and the older people on low incomes we support are seeing their budgets stretched beyond breaking point.
“This winter has been brutal, we have heard dreadful accounts of people in later life sitting in cold, dark homes, or cutting back on other essentials such as food so they can turn a radiator on.
“This poses a health risk to older adults and cannot be allowed to continue happening.
“There are immediate and long-term actions the UK Government can take to support people on low incomes who cannot afford to heat their homes.
“The recent Warm Home Discount extension was welcome, but at £150, it does not go far enough in supporting those in financial hardship.
“We want to see it increased to £400 to match the high cost of energy bills.
“Targeted bill support is also needed in the form of an energy social tariff that protects customers on low incomes from future spikes in costs.
“If the UK Government is serious about tackling the cost of living and raising living standards, it should take meaningful action to lift people out of fuel poverty.”
Jonathan Bean from Fuel Poverty Action, commented:
“Customers should not be fooled: energy bills are still £600 higher than 5 years ago, meaning the suffering will continue for millions of us.
“Up to £500 of our bills is energy firm profits which means that Ofgem and the Government are failing to protect us.
“We especially need a fairer deal on electricity pricing which is four times higher than gas, despite wind and solar energy being cheaper.”
James Taylor, director of strategy at Scope, added:
“Life costs a lot more if you’re disabled. The need to run lifesaving equipment or keep the heating on year-round means bills continue to be steep.
“We’re calling on Ofgem to do much more to protect disabled customers, and for the government to introduce a discounted energy deal for disabled people.”
Uplift Deputy Director Robert Palmer said:

“This is welcome news for millions of households as it shows the UK is starting to turn a corner on energy bills.

“Weaning ourselves off volatile gas is the only real long term route to affordable energy bills and last year we generated record-breaking amounts of renewable energy, with wind power cutting the wholesale cost of electricity by almost a third.
“Compare this to America where Donald Trump is blocking renewable energy and doubling down on fossil fuels, and electricity bills are rising.
“Today’s Price Cap shows we’re on the right path. It’s not just our bills that are benefitting from more renewables, our planet will too. This is a change that cannot come soon enough as already we’re seeing the impacts of climate change caused by our oil and gas dependency and the costs it imposes on everyone, whether that’s flooded homes and businesses or rising food prices.”

British Gas owner still cashes in as households keep facing high bills

The owner of British Gas / Scottish Gas has reported underlying operating profits of £814 million for last year, down from £1.55 billion in 2024, making £163m from its retail businesses.

But the firm is no longer simply a retail supplier:

  • Import reliance: Analysis shows the UK will soon be unable to meet heating demand from domestically extracted gas by 2027, making imported gas and the companies that control its supply even more critical to national energy security.

  • Gas supply: Through a strategic import arrangement with Equinor, Centrica effectively controls around 10% of the UK’s gas supply, a share that gives it influence over the market just as the country becomes increasingly reliant on gas imports.

  • Import infrastructure: Centrica also has part-ownership of a key gas import terminal, further underpinning its position at the heart of UK gas flows, pricing and security.

  • Wholesale gas and power markets: Centrica is a major player in the market trading and optimisation of energy supply. This means it can profit from the volatility in the energy system. In July 2023, it was reported that market price movement meant that its energy marketing and trading division alone made £1.4 billion in profit during the year.

  • Control of storage: Centrica remains the owner of the Rough gas storage facility, a key piece of infrastructure that helps balance supply in winter and mitigate price volatility, yet storage has sat below optimal levels in recent seasons, exposing households to supply risks and higher costs, as the firm argues it needs state support.

  • Customer concerns: British Gas, owned by Centrica, was at the centre of the forced prepayment meter scandal, where vulnerable households were switched onto pay-as-you-go energy or faced the threat of disconnection. A formal investigation into the firm is still ongoing, almost three years after it was opened.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Centrica’s profits are still mind boggling sums for people living in fuel poverty.

“The firm is much more than a household supplier, with real leverage over the nation’s energy supply and security. Through gas import deals, control of storage, stakes in key facilities and role in energy trading and price setting, Centrica sits at the centre of a market most of us only feel when the bills arrive.

“This influence matters because the country is becoming more reliant on imported gas as North Sea output declines. In that context, huge annual profits are not an accident, they reflect a system where utility companies extract value from relatively high bills while households struggle, especially as millions live in cold, damp homes.

“Ministers must ask whether the energy system really works for people, not for the big energy giants that have generated over £125bn in UK profits since 2020.”

Uplift Deputy Director Robert Palmer said:

“The latest profits add to the over £9 billion that Centrica has made since the start of the energy crisis in 2020, all while millions of people have struggled to afford their gas bills.

“The British Gas owner wants us to stay hooked on expensive gas, even though the UK has burned most of the gas that was in the North Sea. Regardless of any new drilling in the UK, we will be dependent on gas imports for nearly two thirds of our gas needs in just five years time and almost 100 per cent by 2050.

“The way to lower bills long term is to build more homegrown renewable energy and free ourselves from gas, whether that’s supplied by Putin’s Russia, Trump’s America or profit-hungry oil and gas companies.“

Cold homes are still killing people in fuel poverty

New official figures from the UK Health Security Agency reveal that more than 2,500 people died in England in connection with cold weather last winter.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It’s truly shocking that more than 2,500 people died in connection with cold weather in winter 2024/25, most of them older people. It lays bare the awful reality that far too many pensioners are still trapped in cold, damp homes that put their health and lives at risk.

“Volatile gas prices, poor quality housing and a lack of adequate support have all contributed to this crisis. And in 2024/25 the situation was made worse by decisions to remove Winter Fuel Payments from many pensioners. We warned this would leave vulnerable older people exposed, and these figures show the deadly consequences of failing to protect those most at risk.

“These deaths also underline the need to go further with cold weather support. Cold Weather Payments too often arrive only after prolonged freezing conditions, when the damage is already being done. Support should be automatic and triggered in advance of forecast cold snaps, not weeks later.

“Ultimately, the only lasting way to stop people dying in cold homes is to tackle the root causes. That means targeted financial support for those most at risk, rapid upgrades to the coldest and leakiest homes through the Warm Homes Plan and wider reform of energy pricing so households are not left paying the price of volatile gas markets.

“No one should be facing another winter where staying warm is a matter of life and death.”

Jonathan Blades, from Asthma and Lung UK, said:

“Freezing temperatures can be particularly dangerous for people with lung conditions.

“Cold air can cause the airways to narrow, making breathing more difficult, it can also irritate the lungs and worsen symptoms of lung conditions like asthma and chronic obstructive pulmonary disease.

“This can also make it harder for the body to fight off respiratory infections such as colds and flu, which are still circulating.”