UK government wants to regulate the heating oil market. What will change for customers

The British government intends to regulate the heating oil market for the first time. This was announced on 13 October 2026 by the Department for Energy Security and Net Zero (DESNZ). On that day, the Minister for energy consumers, Polly Billington, published the government's response to the market study carried out by the Competition and Markets Authority (CMA).

Why the government is acting

The reason is problems at the start of the year. When heating oil prices rose, some suppliers cancelled orders. Customers had to place them again and pay more. The government accepts the CMA's recommendation to strengthen regulation in this sector.

What the plans involve

The government wants a regulatory system for the heating oil market to be created together with the industry. It is intended to:

• set out the standards customers can expect from suppliers,
• protect households in difficult circumstances,
• give customers a clearer route to compensation when something goes wrong.

In the shorter term, the provisions in the codes of practice that set the rules for the industry are to be strengthened. The review will also cover practices involving a minimum order size of 500 litres. For some customers, these mean having to buy more fuel than they need.

What the plan does not mean

The announcement does not indicate that oil prices will be capped in advance. The government is talking about regulating consumer protection and market standards. A House of Commons Library briefing from March 2026 says that heating oil prices are not covered by Ofgem or the energy price cap. According to that document, the government considered that a price cap could have undesirable effects. It could push suppliers out of the market if wholesale prices exceeded the cap.

Help with changing your heating

The government also points to support for oil customers who want to switch to clean energy sources. The heat pump discount for households heated by oil is currently £9,000.

According to GOV.UK, earlier this year the Chancellor also announced more than £50 million of support for low-income families heating their homes with oil. We have not checked the details or conditions of this support on that site.

What this means for you

The changes affect people who heat their home with heating oil. These are mainly residents of rural areas without access to the gas grid. If you rent or own a home heated by oil, it is worth checking the terms of your order: the minimum quantity, the cancellation rules and the complaints procedure. The new regulatory system has yet to be created, so there is currently no date for when it will come into force.