The government has said it will accept the Competition and Markets Authority’s recommendation to bring stronger regulation to the heating oil sector, and has begun work with industry on a regulatory regime for a market that has so far had no dedicated energy regulator. The announcement was made on 13 October 2026.
Why the reform is happening
Heating oil is used by households that are not on the gas grid, mainly in rural areas. The CMA says about 1.5 million people rely on it to heat their homes.
Earlier this year, conflict in the Middle East pushed heating oil prices to record highs, according to the government. Some suppliers cancelled orders when prices rose, forcing customers to re-order at higher prices. The CMA later found that 1,700 households were owed compensation as a result. The government says it provided £53 million of immediate support for vulnerable heating oil customers during the crisis.
The CMA launched its market study on 20 March 2026 and published its final report on 15 July. Its statement on 13 October says the government has accepted all of its recommendations, which are aimed at fair treatment, clear information and routes to action when things go wrong.
What changes
The government’s plans, as published, include:
- A regulatory regime. Government and industry will develop formal regulation of the sector to set the standards consumers can expect, protect vulnerable households and provide clearer routes to compensation.
- Stronger codes of conduct. In the short term, consumer protections in the industry’s existing codes of conduct will be strengthened.
- A review of minimum order sizes. Industry practices that set a minimum order of 500 litres for some consumers, obliging them to buy more oil than they may need, will be reviewed.
No timetable for the new regime has been published, and the detail of who would regulate it has not been set out.
Heat pump support
The government also pointed to the Boiler Upgrade Scheme, under which households using heating oil can receive a discount of £9,000 towards a heat pump. It says July applications were 81% higher than a year earlier, and that 1,042 vouchers redeemed in August were for the £9,000 heating oil grant, 32% of that month’s total.
What it means
For heating oil households, the immediate change is limited to tighter codes of conduct and a look at minimum order sizes. Statutory rules will take longer: the government has said it will work with industry to design them. Heating oil sits outside the energy price cap, which covers gas and electricity, so the new regime is the first attempt to give these households comparable protections.