Government announces increased heating oil payment to be made ‘in the new year’.

Having announced last month that the one-off payment to off-grid properties that use alternative fuels, such as heating oil, liquified petroleum gas, coal or biomass for heating has been increased to £200 for domestic users and £150 for commercial users the Government has now confirmed that the payments will be made ‘as soon as possible in the new year’.

Government confirms Alternative Fuel Payment Scheme for heating oil users to be made through electricity bills not fuel distributors.

The support, in the form of the Alternative Fuel Payment Scheme, was originally announced in September as part of the government’s Energy Prices Bill measures, with a further statement in October confirming that the mechanism for the payment will be in the form of a credit to electricity bills rather than through fuel distributors.

After assuring MP David Duguid in the Commons that those eligible would receive the payment ‘as soon as possible’, Minister of State for Energy and Climate, MP Graham Stuart, confirmed the timing of the payment in a letter.

Mr Duguid commented: “My constituents have rightly expressed their concerns at how long this process has taken but I welcome the commitment from the energy minister that the majority of payments will be issued as soon as possible in the new year.

“It’s vital all those eligible for the grant receive it which is why I will continue to seek assurances that no one will be left behind when the payments are sent out.

“I know that customers want this sooner, but I am told that it has been a complicated process in ensuring the register is correct.”

Assisting the government

In a previous statement on behalf of the liquid fuel industry trade association, UKIFDA, Ken Cronin, CEO highlighted the difficulties involved in identifying those eligible: “We welcome the increased support to £200 for heating oil customers this winter. As previously noted, we have spent the last few months working with the government on how the payment can be made to domestic heating oil users.”

“There is still some work to complete on the logistics of the payment,” Ken confirms. “Given the highly competitive nature of the heating oil market, many users hold active accounts with multiple heating oil distributors making a fixed payment challenging to deliver without duplication.

“We will continue to offer assistance to the government in the design of the payment system through electricity companies. This will take time and customers should await further details from the government. We also note that eligible customers that do not have a relationship with an electricity supplier will be supported through an alternative route to make sure they do not miss out. Details of this alternative route will be confirmed by the government shortly.

“As before, we recommend that customers do not wait if they need heating oil. As we head into winter, many oil heating customers will know that the best and most economical approach is to talk to their local distributors on a regular basis and not leave purchases to the last minute”

The payment will also go to people who use LPG, coal and biomass as their main heating fuel, but it is not clear how people will be expected to prove they use these forms of heating.

Editor’s note: This article was originally published in October 2022 and has been updated to reflect recent changes in the level of support and confirmation of the payment timing.