Households with heating oil are being clobbered with extra charges on top of their hugely increased bills.

Martin Lewis MSE has reported that some of the 1.5M households who rely on heating oil, which includes those in rural areas, are being forced to pay extra administration or service charges for their heating oil, on top of already spiralling costs.

Today, the government announced a £53M support package for households hit by the new energy crises caused by the conflict in the Middle East, including extra funding for households hit with higher heating oil costs.

Unlike the Ofgem price cap on gas and electricity, heating oil prices are not capped. It means they are extremely exposed to rapid or sudden price increases when the cost of wholesale oil goes up, as it has done significantly in the past week due to the war in Iran and problems with supply on the Strait of Hormuz.

The cost per litre of heating oil, on average, is 128.4p today, Monday March 16. For a one-year supply for a typical 2,000 litre household, it would cost £2,564 for a year of heating oil at that price, which is up 127% on last month and more than £1,400 extra.

According to reports from Martin Lewis MSE, heating oil problems are not limited to just the price, and have also seen heating oil users stung with extra charges too.

MSE says in its ‘dossier’ of evidence it is handing to government: “Problems with refunds and additional surcharges. Some households that have accepted refunds are still waiting for their money back. Others are reporting that administration or service charges are being deducted from refunds for cancelled orders.”

MSE quoted letters it received from a heating oil user. It said: “We ordered oil on 11 February. It was cancelled this week. The refunded amount included a deduction for service charge… The new order quote was almost double. We live in a rural Essex. Am disgusted by what feels like profiteering.”

Another said: “This is the message I got from my supplier after I had already placed the order last week. They wanted to offer me 50% less oil for what I had already paid for, and they had taken payment on my credit card.”
A third quoted had written: “Our usual oil company will not issue quotes, and we were told we would find out the cost of our order for 500 litres at point of delivery… I can’t think of any other instance of being in a position where you agree to buy something without knowing how much you will pay!”

Martin added that many households will be forced to pay extra because they cannot simply lower their use, especially those who are medically vulnerable.

MSE says: “People running out of oil – including medically vulnerable users – feel forced to accept inflated prices: People who are desperate for the oil or have health problems and need to keep the heating on, have little choice but to pay extra.

“New ‘price‑on‑delivery‑day’ policies remove price certainty and shift all risk onto consumers. There are reports of a shift to “price on day of delivery” or “quoteless” ordering, removing price certainty for people. Deposits can be demanded upfront with the final cost not clarified until the day of delivery, with an additional cost to be paid (or refund to be issued if the price is lower) or for the amount of heating delivered to be reduced.

“Problems with refunds and additional surcharges. Some households that have accepted refunds are still waiting for their money back. Others are reporting that administration or service charges are being deducted from refunds for cancelled orders.”

The Prime Minister acknowledged the impact of rising oil and gas prices on households in the UK.

He announced the Government had issued a “legal direction” to energy companies to pass on savings from government policies already announced.

And he set out a £53 million package of support for “vulnerable” heating oil customers, focused on “those households that are most exposed”.

He also raised concerns about claims that suppliers of heating oil have cancelled orders and then hiked bills as prices have spiked.

“I simply will not allow companies to make huge profits from the hardship of working people,” he said. “That kind of conduct is completely unacceptable, so if the companies have broken the law, there will be legal action.”

England will receive £27 million to support heating oil customers, which will be distributed by local authorities.

Northern Ireland, which has the highest proportion of homes reliant on heating oil of the UK’s four nations, has been allocated £17 million, Scotland £4.6 million and Wales £3.8 million.

The Treasury said the funding has been allocated based on census data, with the money going to the devolved governments to distribute.