UKIFDA proactively contacted the Energy Minister’s office on Friday 6 March to outline the concerns the fuel distribution industry has regarding the impact of the current price environment on customers, companies and employees, following the escalation of conflict in the Middle East.
We welcome any financial assistance that can be offered to customers. As we did in 2022, we will work with the Government once the details have been confirmed to help communicate them clearly to our customers so that as many of them as possible can benefit.
The fuel distribution industry differs significantly from other energy markets. It is made up of a large number of companies, many of them small, family‑run businesses. This structure creates strong, healthy competition, which is why, before the current crisis, consumer prices had fallen significantly, reaching the long‑term average levels seen over the past 15 years. It is important that any changes to the operating environment do not undermine or impact this competitive market, as this would ultimately disadvantage consumers.
UKIFDA welcomes the Competition and Markets Authority’s (CMA) review and will actively collaborate with the CMA and government officials. We are confident that the review will provide clarity and help address misconceptions about how the sector functions.
The main market driver of heating oil in the UK and Ireland is the wholesale price of jet fuel traded on the European market, as both products are kerosene‑based. The wholesale price of jet fuel has more than doubled during the current conflict, partly due to Europe’s and the UK’s dependence on imports from the Middle East. In 2025, at least 40% of Europe’s jet fuel came through the Strait of Hormuz.
Heating oil is supplied very differently from gas and electricity, and these differences help explain why prices can move quickly either up or down. Instead of a few national suppliers, the market is made up of many local, often family‑owned distributors operating with limited storage and buying fuel at the daily market price.
This creates strong competition and, in normal times, helps keep prices lower. After the 2022 period of global market disruption, heating oil prices returned to average levels far more quickly than those of many other commodities.
There are no long‑term contracts, so oil‑heated households can shop around. However, this also means distributors cannot predict demand in the same way as gas and electricity companies. When demand rises suddenly or wholesale prices shift, delivery times and pricing can be affected.
Most distributors have little or no storage. Many hold no more than two days’ supply. Therefore, they collect fuel from refineries or terminals at the market price almost daily. In effect, they are price takers.
At a time of year when demand usually falls, many households have been placing orders because of the crisis in the Middle East. This has created higher-than-usual demand, affecting delivery times. With the ongoing impact of the crisis and the resulting changes in wholesale prices, many distributors are now providing prices closer to the delivery date.
Everyone in our industry understands the pressure the current situation places on oil-heated households. The situation in the Middle East is changing quickly, making it difficult to predict how prices will move in the coming weeks. If your tank is running low, the best approach is to order as normal.
Our current advice is:
16th March 2026
