Rachel Reeves to set out extra support for UK households facing surge in heating oil costs | Rachel Reeves
Rachel Reeves will give extra support next week to UK households facing a rise in the cost of heating oil due to conflict in the Middle East.
The chancellor is expected to make plans to help low-income or other vulnerable people, especially in rural areas. The aid will be distributed through councils in England using the new crisis and resilience fund.
Although the amounts in question have not yet been determined, it is understood that ministers can provide additional support to this fund if necessary. The devolved governments in Scotland, Wales and Northern Ireland will receive money to deliver aid.
Heating oil, which provides heating and hot water to an estimated 1.7 million households in the UK, is not covered by Ofgem’s energy cap.
In some examples seen by the Guardian this week, customers have seen the cost of refilling tanks almost triple since the disruption in fuel supplies following the start of the US-Israeli war against Iran.
In Northern Ireland, heating oil is the primary source of heating for two-thirds of households.
Reeves this week said he recognized the “unique challenges” faced by people who depend on heating oil and had asked Treasury Secretary Spencer Livermore to discuss possible solutions with rural and Northern Ireland MPs.
As well as pressuring oil retailers not to exploit the Iran crisis to excessively increase forecourt prices, ministers asked the Competition and Markets Authority watchdog to keep an eye out for unfair increases in heating oil prices.
People who use the fuel generally buy it in bulk to fill tanks because their homes are not connected to the mains gas network.
As wholesale prices of heating oil increased, some people had their pre-existing orders canceled, forcing them to reorder at a higher price. Others struggled to find suppliers to deliver to them.
While ministers are confident that Keir Starmer’s refusal to support a first strike on Iran has broad public support, they are extremely cautious about the impact of high fuel and oil prices, especially if the conflict is prolonged.
The crisis and resilience fund, which will operate from April 1, provides money to English councils to support communities particularly under financial pressure. It has funding of £1bn a year for the first three years.
A Treasury source said: “Families relying on heating oil can’t spread the cost; you’ll have to come up with hundreds of pounds upfront when the tank is empty. That’s why the chancellor is providing targeted help to low-income and vulnerable households across the UK.”
