The watchdog’s final report separates the causes of the exceptional price increases from concerns about how customers are protected when markets become volatile.
Average heating oil prices rose from 64ppl in February 2026 to 104ppl in March, before peaking at 123ppl in April – 92% above their pre-conflict level. For a typical 500-litre order, the average cost increased by around £200 between February and March, from approximately £320 to £520. CMA found that the vast bulk of the March price increase was attributable to higher wholesale kerosene costs, and increased distributor operating costs, including longer collection journeys and higher haulage costs as supply tightened.
In its conclusion, the CMA noted that retail prices closely track wholesale kerosene prices and that distributor operating margins are generally thin. There was a small increase in margins as demand exceeded supply, but the CMA concluded that the effect on the retail price was limited and margins quickly returned to typical seasonal levels. The report also notes that distributors can make losses during quieter summer months and that competition remains strong
The CMA found that most heating oil households have a good choice of suppliers and that there is a high level of price transparency.
Customers in remote areas with fewer supply options can face higher prices but the CMA found that this largely reflects the higher cost of supplying these areas rather than a lack of competitive pressure.
Stronger protection during future disruption
Alongside the wider market study, the CMA investigated concerns that some confirmed customer orders had been cancelled as prices rose.
Its review found approximately 1,700 cancelled orders but stresses that the vast majority of orders placed were fulfilled and that the cancellations involved a relatively small number of distributors. While affected customers received refunds, some subsequently had to reorder at higher prices with the CMA estimating the additional cost may have been between £150 and £350 per customer.
A number of the suppliers involved have agreed to compensate affected households and the CMA is continuing discussions where redress is still required.
While the cancellations represented a small part of the market, the CMA has highlighted the need for greater protection for heating oil customers with increasing price volatility.
As an interim measure, the report specifically recommends that governments and consumer bodies work with UKIFDA and the Northern Ireland Oil Federation to strengthen existing codes, customer initiatives and access to dispute resolution. but rejected a heating oil price cap. It concluded that a cap would offer only limited protection against internationally driven wholesale price increases.
Industry welcomes findings
Responding to the report, UKIFDA welcomed the confirmation that distributors had not materially benefited from the crisis and that the majority of the increase resulted from wholesale prices and associated costs outside the industry’s control.
The association said it had contacted the Department for Energy Security and Net Zero during the first week of the crisis to raise concerns about the impact of higher prices on customers and had worked across the devolved nations to secure financial assistance for the most vulnerable.
Ken Cronin, UKIFDA chief executive, said: “It underlines that distributors did not materially benefit from the Iranian crisis despite accusations to the contrary, and the majority of the price increase was due to the underlying wholesale price and associated costs which were outside the control of the industry.
“The market was found to be competitive with a good choice of suppliers. At the start of the crisis, we immediately contacted the government regarding our concerns about the impact on our customers and, in that same spirit, we will work with all government bodies on the recommendations set out in this report.”
The CMA will now work with governments, regulators and the industry to consider how its recommendations should be implemented. The UK Government has committed to responding formally within 90 days.
The report ultimately draws a clear distinction between the global market forces that caused the price spike and the need for consumer-protection at such times.
Its findings clear the wider distribution industry of accusations of profiteering, while recognising that customers need greater confidence, support and access to redress when exceptional disruption occurs.
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