'My heating oil costs have more than doubled since Iran war started'

The price of heating oil has spiked in the aftermath of the US-Israeli war with Iran, leaving some customers who rely on it facing significantly higher costs.

Fran Barrett, a teacher who lives in a Cheshire village not on the gas network where everyone is dependent on oil, said she first saw prices double last week, and is now unable to secure a delivery at all.

Barrett told BBC Your Voice her oil tank is about a third full and she is saving what's left solely for hot water, having turned the heating off completely.

Chancellor Rachel Reeves said there was "price gouging" in the market and some heating oil companies were using the Middle East crisis as "an opportunity to rip off consumers".

Barrett told the BBC: "The first quote I had was £314 for 500 litres. Then within two or three days of the conflict starting, it went up to £653," she said.

As of Monday, she was being told a supplier could not be found in her area.

The global oil price reached nearly $120 a barrel on Monday, a four-year high, though it has since fallen. The jump was sparked by fears of a lengthy disruption to supplies caused by the war.

Those who use heating oil often store it in a tank outside their property and are among the first to feel the impact of rising prices.

Only 3% of households in England and Wales said oil was their only source of central heating, according to a 2021 census, and 5% of households in Scotland.

But according to the Consumer Council, about 500,000 homes in Northern Ireland use heating oil, almost two-thirds of all households.

Some customers in Northern Ireland have reported an 81% increase in bills, while some in rural homes in England, like Barrett, say prices have doubled.

There is no cap to limit the cost of heating oil in the way households benefit from regulator Ofgem's price cap on gas and electricity bills.

"Some businesses are using this crisis as an opportunity to rip off consumers," Reeves said on Tuesday, adding: "That is why we've asked the CMA (the Competition and Markets Authority) to look at the issues around heating oil."

She added: "You've got price gouging, and the way to deal with that is ensure that customers are treated fairly."

Reeves has promised meetings between the Treasury and rural and Northern Ireland MPs on Wednesday to look at "action we can take" to support those using heating oil.

It comes after the CMA warned suppliers against profiteering by hiking the price of heating oil for those who have already placed orders.

"We won't hesitate to take action if we suspect that consumer or competition law is being broken," acting executive director for consumer protection Emma Cochraine said.

Conservative leader Kemi Badenoch has called for the CMA to go further and launch an investigation into the heating oil market.

In response to the chancellor's claim that there was price gouging in the market, the UK and Ireland Fuel Distributors Association (UKIFDA), which represents heating oil suppliers, said in a statement: "We cannot comment on specific cases.

"This is an exceptionally difficult time. We have seen a very large and unexpected increase in demand, and most UKIFDA members have limited stock at their sites and constantly replenish from terminals and refineries.

"We have spoken to many distributors who, despite the very large price swings and demand, are honouring orders as quickly as they can. We know that the CMA is monitoring this, and we support this approach."

Heating oil is based on kerosene, produced from crude in oil refineries.

Relatively little heating oil is kept in storage, and the US-Israel war with Iran has cut off access to the refineries in the Middle East where much of Europe's supply is produced, resulting in a price surge.

There is relatively little tax on heating oil compared to petrol and diesel, so changes in the wholesale priceproduce a bigger swing in the prices charged to homeowners.

The industry is made up of hundreds of relatively small local suppliers, who do not keep large stocks and rely on the open market to get new supplies.

The online heating oil marketplace BoilerJuice saw a surge in demand last week, with five times higher than the usual number of orders.

The combination of the rising wholesale price, uncertain outlook and much higher levels of demand led to many suppliers temporarily withdrawing from the market, but they are returning as the situation stabilises.

BoilerJuice CEO Tim Buckman said that on Monday only 40% of postcodes had any offers of heating oil available on its site. That has improved to 80% on Tuesday.