Hundreds of people left out of pocket when suppliers cancelled heating oil orders because of the Iran war will receive compensation.
The Gulf conflict caused an immediate spike in the price of oil, with heating oil – often used in rural homes with no gas connection – particularly impacted. Average heating oil prices shot up by 92 per cent at their peak.
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Some customers had their contracts cancelled by suppliers as a result and were forced to reorder at much higher costs.
Around 1.5 million homes in the UK are heated with oil rather than gas.
Heating oil is not covered by Ofgem’s energy price cap, meaning these homes had little protection from the hikes.
Within days of the conflict breaking out, shadow energy secretary Claire Coutinho wrote to her then-government counterpart, Ed Miliband, warning him of the problem.
Some families had seen orders cancelled and then been quoted twice the price for the same delivery, she wrote.
Others were forced to buy larger amounts than they wanted, leaving them “facing extra bills of several hundred pounds just to keep their homes warm”, she said.
Ministers said the Competition and Markets Authority (CMA) would gather evidence and look at whether consumers were being treated fairly.
The competition watchdog has now said that hundreds of customers will receive compensation.
Around 800 people have been notified, and hundreds more are set to be contacted.
The CMA said suppliers had joined its compensation scheme after it raised concerns about possible breaches of customer contracts.
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The CMA said around 1,700 customers were likely to have been affected, with some people paying between £150 and £350 more for replacement heating oil.
Customers whose suppliers have joined the compensation scheme, and who paid more for replacement oil, will receive a payment covering the difference between the original and replacement order.
Customers whose contracts were cancelled but who did not purchase a replacement will have their original order honoured at the agreed price.
Sarah Cardell, chief executive of the CMA, said: “Heating oil isn’t a luxury, it’s a necessity that many people rely on to have hot water and warm homes.
“During the price spikes earlier this year, hundreds of customers were left out of pocket or without fuel after their orders were cancelled.
“That’s why we’ve pressed suppliers to put it right.
“They’ve now agreed to compensate those affected by issuing compensation or honouring their original contracts.”
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