Rachel Reeves will set out extra support next week for households across the UK facing a surge in the cost of heating oil due to the conflict in the Middle East.
The chancellor is expected to set out plans to assist those on low incomes or with other vulnerabilities, particularly in rural areas. The help will be delivered in England via councils using the new crisis and resilience fund.
While the amounts involved have not yet been set out, it is understood that ministers could provide extra support to this fund if needed. In Scotland, Wales and Northern Ireland, devolved governments will receive money to deliver the help.
Heating oil, which provides heating and hot water for an estimated 1.7m UK households, is not covered by Ofgem’s energy price cap.
In some examples seen by the Guardian this week, customers have seen quoted costs to refill tanks almost triple since the disruption to fuel supplies after the US-Israeli war on Iran began.
In Northern Ireland, heating oil is the primary heating source for two-thirds of households.
Reeves said this week she recognised the “unique challenges” faced by people reliant on heating oil, and has asked Spencer Livermore, the financial secretary to the Treasury, to discuss possible remedies with rural and Northern Irish MPs.
As well as putting pressure on petrol retailers not to exploit the Iran crisis to excessively increase forecourt prices, ministers have asked the Competition and Markets Authority watchdog to look out for unjustified increases in the price of heating oil.
People who use the fuel generally purchase it in bulk to fill tanks, often because their home is not connected to the mains gas network.
As wholesale prices of heating oil have risen, some people have had pre-existing orders cancelled, forcing them to order again at a higher price. Others have struggled to find suppliers willing to deliver to them.
While ministers are confident that Keir Starmer’s refusal to support the initial attack on Iran has the broad support of the public, they are deeply wary about the impact of higher fuel and petrol prices, particularly if the conflict drags on.
Set up to run from 1 April, the crisis and resilience fund gives English councils money to support communities, particularly with financial pressures. It has a funding of £1bn a year for an initial three-year period.
A Treasury source said: “Families who rely on heating oil can’t spread the cost – when the tank’s empty, you have to find hundreds of pounds upfront. That’s why the chancellor is providing targeted help for low‑income and vulnerable households across the UK.”
