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.”