Carmichael welcomes CMA call for tougher regulation of heating oil market
Orkney and Shetland MP, Alistair Carmichael, has welcomed the report today by the Competition and Markets Authority (CMA) into the heating oil market, which calls for tougher regulation of the sector to protect consumers from unfair practices.
The CMA investigation was commissioned following extreme price rises in heating oil following the conflict around Iran earlier this year, with reports of some heating oil companies cancelling orders in order to set higher prices. Average retail prices were, at their peak, 92% higher than before the conflict.
The CMA found that although the home heating oil market is generally competitive and suppliers have not profited materially from the crisis, consumers are not as well protected as those connected to the grid.
The CMA recommended for the UK government to introduce a new regulatory regime for heating oil suppliers, which would require suppliers to register and meet minimum standards and to clearly signpost available payment plans and minimum purchase volumes, and would create a register for vulnerable households. The CMA is also recommending a review of rules and regulations around minimum order volumes to allow people to buy smaller amounts of heating oil.
Mr Carmichael said:
“For years we have been told that proper regulation of the heating oil market was not necessary because it was working as intended. The CMA’s report today makes it clear that at the very least there are some areas where that is not the case and where the government needs to take a closer eye.
“In the isles people have few alternatives to heating oil so getting this right really matters. We may be in the summer now but it will not be long before people – particularly vulnerable individuals – are looking to refill their tanks ahead of winter.
“The price hikes around the Iran war should be considered a warning shot – it is on the government to ensure that the market is better regulated before the next economic shock hits home.”