UKIFDA is deeply disappointed that the Budget failed to provide meaningful support for rural heating oil customers, who face exceptionally high prices, despite providing support for households connected to the mains gas grid.
Wholesale prices have more than doubled since the Middle East conflict began, placing significant pressure on households, particularly in rural communities that rely on heating oil and are already facing rising costs.
The government should have temporarily suspended VAT on heating oil during the winter, as recommended by UKIFDA and independently by other organisations. It should also have increased targeted support for the most financially vulnerable households and ensured that existing support was communicated effectively so that those eligible for help were aware of it and able to access it.
The suspension of import tariffs on potential heating oil supplies from markets such as the United States is welcome but is likely to have only a modest effect on prices over the longer term. It is an important measure because it helps ensure the UK pursues every available avenue to maintain supplies of kerosene during this difficult period, but it does not address the immediate financial pressures facing heating oil households.
Earlier this year, conflict in the Middle East led to sharp increases in wholesale jet fuel prices, which resulted in higher heating oil prices across the UK. Jet fuel and heating oil are both kerosene-based products and are affected by the same underlying international market. As UKIFDA explained at the time, heating oil distributors purchase fuel at prevailing wholesale market prices and are therefore price takers.
The Competition and Markets Authority’s (CMA) recently published findings supported this, concluding that the sector had not materially benefited from the period of energy market disruption, a conclusion the government accepted.
Price pressure has continued, with wholesale jet fuel almost doubling in value since before the conflict began.
UKIFDA recognises the significant impact that sustained high wholesale prices continue to have on households, particularly those in rural communities that rely on heating oil.
The industry remains committed to supporting its customers, working constructively with governments across the UK, and raising awareness of available support schemes, independent advice and practical measures that can help households manage their energy costs.
-Ends-
28th October 2026
