UK households relying on heating oil are experiencing increased financial strain due to the ongoing tensions in the Middle East. Approximately 1.5 million households use home heating oil, which is not protected by the Ofgem price cap that regulates energy costs.
The End Fuel Poverty Coalition has highlighted a sharp rise in heating oil prices, reaching levels comparable to those seen during the early stages of the Ukraine conflict. The cost of 1,000 liters of heating oil has surged to nearly £985, up from £670 in January.
Simon Francis, coordinator of the End Fuel Poverty Coalition, emphasized that households using heating oil are particularly vulnerable to price hikes, facing challenges in making energy-efficient home improvements due to high costs. While other households benefit from the energy price cap, those relying on heating oil are already feeling the financial strain and may require immediate assistance.
Financial expert Martin Lewis has also warned about the impact on heating oil consumers, stressing the lack of regulation in the market. Recent disruptions in oil shipping through the Strait of Hormuz have contributed to the price surge, with Brent Crude Oil reaching approximately $87 per barrel.
Energy suppliers are withdrawing fixed-price tariff options, leading to a significant reduction in available fixed deals, as acknowledged by data from Uswitch. Despite an upcoming decrease in energy prices following the announcement of the new Ofgem price cap, experts anticipate a potential 10% increase from July, driven by elevated gas prices.
Forecasters at Cornwall Insight predict a substantial rise in the Ofgem price cap for the July to September period, reaching £1,801 annually, representing a £160 increase from the April cap. However, the final price cap will be determined by wholesale price averages over a three-month period, contingent on the duration of the Middle East conflict.