UK households relying on heating oil are feeling the pinch of increased costs due to ongoing tensions in the Middle East. Approximately 1.5 million homes use heating oil, which is not protected by the Ofgem price cap that regulates energy prices.
According to the End Fuel Poverty Coalition, the price of heating oil has surged to levels not seen since the early stages of the Ukraine conflict. Some customers are reporting a significant increase, with the cost of 1,000 liters of heating oil rising to nearly £985 from £670 in January.
Simon Francis, the coordinator of the coalition, highlighted that these households, often facing fuel poverty, are particularly vulnerable to sudden spikes in oil prices. While many households benefit from the energy price cap, those relying on heating oil are already experiencing financial strain and may require immediate assistance.
Financial expert Martin Lewis also issued a warning for heating oil users, noting the challenges in finding affordable options in the unregulated market. Rising oil prices, exacerbated by recent disruptions in oil shipping routes, have led to a decrease in fixed-price tariff deals offered by energy suppliers.
Although the Ofgem price cap is set to decrease in April, experts anticipate a subsequent rise in energy prices by around 10% from July, primarily driven by increased gas prices. Analysts project a significant increase in the price cap to £1,801 a year for the period from July to September, dependent on the duration of the Middle East conflict and average wholesale prices.
The evolving situation underscores the vulnerability of households reliant on heating oil and the potential impact of global geopolitical events on domestic energy costs.