Almost 1.4 million homes are facing an instant £600-plus rise in heating oil costs amid claims of ‘shameful behaviour from rogue suppliers’.
Latest figures show the bulk price of heating oil – the main source of warmth for ‘off-grid’ homes in rural areas – has doubled within a week to over £1.23 per litre.
The spike follows warnings by Qatar‘s energy minister Saad al-Kaabi that the Iran War could halt all Gulf production with days and ‘bring down the economies of the world‘.
The price of Brent crude – a crucial benchmark – stands at a three-year high of $93 and Mr al-Kaabi predicted it would hit $150 if the war continues for several weeks. The White House has made clear it expects military operations to last ‘four to six weeks’.
Shadow Energy Minister Claire Coutinho has now accused domestic suppliers of using the crisis as cover to ‘price gouge’ heating oil customers.
She has called for the Competition and Markets Authority to investigate and demanded the government enforces proper price transparency.
In a letter to Energy Secretary Ed Miliband she writes: ‘Families are reporting shameful behaviour from rogue heating oil suppliers which can only be described as blatant profiteering.
‘Some have had previously-booked deliveries cancelled by their supplier, only to be called back and offered the same oil, to the same address, on the same day, at twice the price.’
The price of brent crude oil has shot up since the start of the war last week and now stands at a three-year high of $93
A huge explosion rocked Tehran on Saturday after the Israeli Air Force attacked an oil complex
She said people were being forced to order large minimum quantities ‘meaning they are suddenly facing extra bills of several hundred pounds just to keep warm. This is unacceptable.’
The Mail on Sunday has established that online buying platform Boilerjuice is turning down tanker orders in some areas, instead offering customers 20-litre ‘fuel boxes’ at five for £296.99 – an eye-watering £2.96 per litre.
Distributors’ trade group UKIFDA says the spike has been caused because heating oil, like jet fuel, is kerosene-based.
Both are traded on European wholesale markets which depend on Gulf oil tankered through the Strait of Hormuz, now closed by Iran.
UKIFDA CEO Ken Cronin said distributors bought oil ‘almost daily’ and had themselves been hit by fast-moving wholesale costs.
‘In a market this volatile, lack of certainty is difficult,’ he said. ‘Our members are doing everything they can to support oil-heated homes.’
Unlike electricity and gas supplies, there is no price cap on oil. A typical 1,000-litre order which cost £600 a week ago would now cost £1,230, according to Boilerjuice.
According to latest Census figures, 865,000 homes in England and Wales – mostly in eastern England, Wales, the north-east and the west country – 127,000 in Scotland and 380,000 in Northern Ireland are affected.
Campaigners fear these mostly rural areas, often with limited public transport, will also be hit with a ‘double-whammy’ through spiralling diesel and petrol prices.
RAC head of policy Simon Williams said petrol had increased by 3.7p to 136.53p a litre inside a week, with diesel up by 6p to a 16-month high of 148.35p.
Howard Cox, founder of the FairFuelUK campaign said small independent petrol stations should not be blamed.
‘It is further up the fuel supply chain where greed is most endemic – notably the branded oil companies and their wholesalers,’ he said.