Response to the CMA’s statement of scope on their heating oil market study

Response to the CMA’s statement of scope on their heating oil market study 184 KB

Citizens Advice welcomes the opportunity to respond to the Competition & Markets Authority’s statement of scope on their heating oil market study. The recent conflict in the Middle East has increased the cost of fuel which is particularly impacting households who rely on heating oil and LPG. In the UK, around 25% of homes in rural areas, approximately 1.5 million properties, are not connected to the mains gas network and rely on fuels such as heating oil or LPG. Households who rely on these fuels are not protected by the price cap, and are therefore at risk of sudden price increases when global markets are impacted. Since the conflict in the Middle East, Citizens Advice advisors are seeing a significant increase in clients seeking support due to the rise in price of heating oil. The limited protections in the market leaves these clients at risk of unaffordable prices and poor conduct from suppliers. One client told us that where they had previously been paying £300 for 500 liters of oil from their supplier, they had now been quoted £833 - almost triple the price. Another told us that their supplier had cancelled their delivery, and when they went to rebook it the same oil had increased by 91%. This increase in price has forced many into difficult financial situations. Our clients have told us how it has impacted their mental and physical wellbeing. One client who has health issues and needs to shower regularly told us that they have been unable to since February as they cannot afford to top up their oil. The only hot water they have is from boiling their kettle. Households who rely on heating oil often face structural and societal disadvantages. They are more likely to live in rural locations, be elderly and/or have a disabled member of the household. It is therefore crucial that the CMA’s analysis takes into consideration how the market can best support these households and what mechanisms could protect them from market volatility. We have outlined our full recommendations for how the CMA can improve the heating oil market in our consultation response.