Heating oil suppliers are “blatantly profiteering” from the conflict in the Middle East by doubling the price they charge households, an MP has told the competition watchdog.
Harriet Cross, a Conservative MP for the Scottish seat of Gordon and Buchan, called on the Competition and Markets Authority (CMA) to investigate sudden price hikes.
She has also written to the energy secretary, Ed Miliband, asking the government to support households struggling with unexpected increases in their energy bills.
An estimated 1.7m households in the UK, mostly in rural areas that are not connected to the mains gas network, rely on heating oil to warm their homes, cook food and provide hot water.
Consumers have seen prices for heating oil almost treble since the start of the war in Iran, at a time of great volatility in global oil markets, while some households have been told by their suppliers that they cannot guarantee the cost or timing of an oil delivery.
The cost of heating oil is not covered by Ofgem’s energy price cap and it can vary between suppliers and in different parts of the country. Heating oil is typically a form of kerosene, meaning prices are linked to the cost of jet fuel, which is more reliant on Gulf suppliers than other petroleum products.
Heating oil is the primary heating source for two-thirds of homes in Northern Ireland, about 10% of households in Wales and 5% of homes in Scotland.
However, Cross said 45% of homes in Aberdeenshire, including in her constituency of Gordon and Buchan, are not connected to the mains gas network and are therefore reliant on heating oils or liquefied petroleum gas (LPG).
Cross said she had been contacted by several constituents in rural areas who are facing sudden and unexpected price hikes, with the cost of 700 litres of heating oil doubling from £500 before the US and Israel launched attacks on Iran to more than £1,000, while delivery times have also been extended.
The MP said many of those affected by the cost increases were “disproportionately rural, often elderly and vulnerable”.
She is calling for a mandatory price transparency scheme to allow consumers to find the cheapest suppliers and has asked the consumer watchdog to look into what she believes to be “evidence of longstanding consumer harm”.
Cross wrote to the CMA: “I have been contacted by constituents who have experienced behaviour from suppliers that can only be described as blatant profiteering.
“Families have had existing delivery bookings cancelled, only to be called back the same day and offered delivery of the same oil, to the same address, on the same day, at twice the original price.”
Dave Chapman, from Derry, told the Guardian the rise was concerning for elderly people, with much of Northern Ireland still cold at this time of year. He added: “For people with respiratory problems, like myself, it is essential to maintain a stable temperature,” he said. “Although we are far from the conflict zone, the affects of closed supply lines may continue to cause problems for many weeks or even months to come.”
Rachel Reeves criticised heating oil companies on Wednesday, telling MPs on the Treasury committee that she was “looking at some of those market practices”, including suppliers telling customers they would only deliver large quantities to their tanks.
The chancellor has previously raised the prospect of government help, saying she recognised households reliant on heating oil are facing “unique challenges”. She told MPs on Wednesday she would “make decisions on what further action is … needed” after a meeting later in the day between officials and MPs from Northern Ireland and rural areas.
The CMA warned on Monday that it expected consumers who had ordered heating oil to receive it at the agreed price, adding it “won’t hesitate to take action” if it suspects consumer or competition law is being broken.
Earlier in the week, Miliband wrote to the chief executive of the UK and Ireland Fuel Distributors Association (UKIFDA) to say the government was gathering evidence and looking into whether consumers were being treated fairly.
Kerosene prices almost doubled between late February and 9 March, according to figures from the UKIFDA. It said the average price for jet kerosene this year was 44.2p a litre until 24 February, before it rose to 49.5p a litre on 27 February and 87.4p a litre on 9 March.
