Press Statement: Home Heating Oil Market Is Generally Competitive

15th July 2026

CMA finds “home heating oil market is generally competitive, and suppliers have not profited materially from the crisis”

We note that the Competition and Markets Authority’s report today confirms that heating oil distributors did not profit materially from the Iranian crisis. The vast bulk of the price increase to consumers was related to increased wholesale prices and additional distributor costs which are outside the control of the industry.

The CMA commented that “Overall, the evidence shows that the home heating oil market is typically competitive, with retail prices closely linked to wholesale prices and distributors’ operating margins generally thin.”

The CMA analysis also shows that oil households generally have a good number of distributors to choose from across the UK, although some regions have fewer options due to population density and market size. It also shows good price transparency in the home heating oil market during normal market conditions.

We note that the CMA found, in the vast majority of cases, that distributors acted in accordance with contractual terms despite the market turmoil, increased prices being paid and a huge demand increase. However, there were a small number of cases found, which require redress, and we note their ongoing work.

In the first week of the crisis, UKIFDA, on behalf of the industry, contacted the Department for Energy Security and Net Zero to highlight our concern about the impact higher prices were having on our customers, and we have worked diligently across the devolved nations to get financial help to the most vulnerable as quickly as possible.

In that same spirit, the CMA has made a number of recommendations regarding how the system can be improved. We will work with all governments to agree on how these recommendations can be best implemented for the benefit of our customers.

Ken Cronin, CEO of UKIFDA, states: “I would like to thank the CMA and the industry for working speedily together to get this report finalised.  It underlines that distributors did not materially benefit from the Iranian Crisis despite accusations to the contrary, and the majority of the price increase was due to the underlying wholesale price and associated costs which were outside the control of the industry.

“The market was found to be competitive with a good choice of suppliers. At the start of the crisis, we immediately contacted the government regarding our concerns about the impact on our customers and in that same spirit, we will work with all government bodies on the recommendations set out in this report.”

• Retail heating oil prices in January 2026 were lower than prices in July 2011 despite 45% inflation and 17% adverse currency movements.
• The main price driver of heating oil in the UK and Ireland is the wholesale price of jet fuel (or “Jet Kero”) which is traded on the European market. This is because jet fuel and heating oil are both kerosene based and all contracts between suppliers and distributors refer to this market price. Distributors are therefore price takers, not in control of wholesale prices. The underlying issue here has been geopolitical developments.
• The main reason for the initial price rise was that by 2025 Europe imported c. 40% of its jet fuel requirement from the Middle East, with analysts confirming their view that there was not enough refining capacity in Europe to meet the shortfall caused by the closure of the Strait of Hormuz. This is because, since 2009, nearly 30% of the refineries in Europe have been closed or transformed to produce other fuels.  In the UK, the OFT noted in 2011 that there were eight operational oil refineries; today, there are only four.
• Following the disruption caused by the impact of the Ukraine invasion, heating oil prices showed the quickest recovery to normal pricing of any energy commodity in the UK