The Competition and Markets Authority (CMA) announced that it has secured compensation for off-grid domestic heating oil customers whose orders were unfairly cancelled following severe wholesale price shocks.[1]

The action follows a wider CMA market study into the off-grid energy sector, which revealed that a subset of suppliers had cancelled lower-priced orders during energy market spikes, leaving consumers stranded or forced to re-order at inflated prices. 

This underscores the CMA’s continued push to protect vulnerable households from unfair trading practices, particularly in unregulated sectors.

Background

Around 1.5 million UK households—predominantly located in rural off-grid areas—rely on heating oil for their basic heating and hot water needs. Unlike standard mains gas and electricity customers, heating oil consumers buy fuel in bulk shipments and operate outside the standard statutory protections enforced by Ofgem.

Following geopolitical conflicts and supply chain disruptions, wholesale oil prices surged dramatically, peaking at 123ppl in April 2026, a 92% increase from February.[2] During this period, certain suppliers cancelled existing customer orders. Approximately 1,700 households were affected by these cancellations.

CMA Scrutiny

Sarah Cardell, the CMA’s Chief Executive, said heating oil is “a necessity” and that hundreds of customers were “left out of pocket or without fuel” after cancellations.[3] Although consumers received refunds for their initial purchases, many were forced to immediately re-order fuel at replacement costs that were £150 to £350 higher per delivery. Others were left without heating during cold periods while attempting to secure alternative supplies. 

The CMA opened its heating oil consumer enforcement case in March 2026 using powers granted under the Digital Markets, Competition and Consumers Act 2024 (DMCCA).[4] Following direct engagement by the CMA, several key heating oil suppliers agreed to set up a voluntary compensation framework: consumers who were forced to purchase replacement fuel at higher prices will receive payments covering the difference. Consumers who chose not to re-order will have their original purchases honored at the original agreed price. No fine or formal infringement decisions have been announced, though the CMA indicated earlier that it is “preparing to take court-based enforcement action against firms that fail to compensate customers voluntarily”.[5]

Alongside the targeted compensation scheme, the CMA’s market study revealed that a structural lack of safeguards in the heating oil market leaves households vulnerable. The CMA advised the UK government to implement a regulatory framework establishing mandatory operating standards. This proposal includes clear rules for price quotes and cancellations, defined guidelines on minimum purchase volumes and payment plans, enhanced protections for vulnerable consumers, and access to an independent alternative dispute resolution scheme.

Key Takeaways

  1. Contracts may be binding notwithstanding market volatility. Depending on the terms agreed, suppliers may not be in a position to cancel customer contracts when wholesale input costs surge. Cancelling orders to resell the inventory at current spot rates may amount to a breach of contract and an unfair trading practice. Businesses facing supply chain issues may have to absorb costs rather than pass them on to their customers. 
  2. The CMA is looking closely at unregulated sectors affecting cost of living. Firms operating in sectors without a dedicated statutory regulator (such as Ofgem, Ofcom, or the FCA) should not assume they are beyond regulatory scrutiny. The CMA has signalled it is ready to use its broad consumer protection powers to address problems in a wide range of consumer markets. 
  3. Voluntary redress can help avoid costly litigation. The CMA’s approach shows that proactive compliance and willingness to offer voluntary redress can help avoid formal sanctions. But the CMA has also signalled it will not hesitate to pursue non-cooperative heating oil suppliers in court, indicating enforcement will follow where consumer harm remains unaddressed. 
  4. Cost of living enforcement remains a priority. Whether tackling “drip pricing” across travel and ticketing or addressing unfair order cancellations in off-grid energy, the CMA’s strategic priorities remain firmly tied to protecting household budgets.

[1] CMA, Press Release “CMA secures compensation for heating oil customers” (28 August 2026).

[2] Ibid.

[3] Ibid.

[4] CMA, Press Release “CMA examines concerns about heating oil“ (11 March 2026).

[5] Ibid.