Homeowners who paid extra for heating oil during the conflict in the Middle East can expect a windfall after a compensation agreement has been reached.
After heating oil price spikes and cancelled orders saw hundreds of customers out of pocket when bills surged, the Competition and Markets Authority (CMA) intervened to demand suppliers gave appropriate compensation.
Following months of consultation, which began in March 2026, a deal has now been reached.
How much did heating oil costs rise?
It is estimated that for the 1.5 million homes that rely on heating oil to provide warmth and hot water, costs increased by around £150 – £300 during February to April. This was a result of either orders being cancelled and homeowners having to source replacement oil at a higher cost, or orders being charged at an inflated price compared to normal – also referred to as price-gouging.
According to government information: "Consumers paid around £200 more for a typical 500-litre order in March 2026 than they would have in February 2026 – increasing from around £320 to £520 (64%). Around £170 of that increase reflected higher wholesale costs.
"From February to March 2026, average prices for heating oil increased by 64% (41 pence per litre) from 64ppl to 104ppl and peaked at 123ppl in April 2026 – a 92% increase from February."
How much compensation can you expect to receive?
It is expected that thousands of pounds in total will be issued back to homeowners who use a supplier that has joined the compensation scheme.
For those who paid extra for replacement oil, a refund will be made that covers the difference between the original and replacement order.
Those who did not have their order cancelled, but paid more than quoted, will receive an amount that honours the original order.
How the repayment scheme will work
Those customers who are eligible for a refund don't have to do anything, but to be eligible your supplier needs to have signed up to be involved. You will be contacted directly if yours has, and it is estimated that more than 800 homeowners have already been notified.
If you are seeking compensation for a replacement purchase, you will need to be able to provide evidence of the amount paid using a receipt and delivery note.
Sarah Cardell, Chief Executive of the CMA, said: "Heating oil isn’t a luxury, it’s a necessity that many people rely on to have hot water and warm homes.
"During the price spikes earlier this year, hundreds of customers were left out of pocket or without fuel after their orders were cancelled. That’s why we’ve pressed suppliers to put it right. They’ve now agreed to compensate those affected by issuing compensation or honouring their original contracts."
Although the agreement has been reached, the government confirmed that the CMA will continue to work with suppliers to finalise compensation arrangements and ensure affected customers receive the payments they are due.
