I have also highlighted our discussions with the Government about the unique role our sector plays as the last energy industry that truly knows its customers. We see them regularly, delivering fuel, servicing boilers and, very often, checking that they are safe and well.
It is therefore encouraging that the Competition and Markets Authority’s (CMA) recent review has confirmed what the industry has said from the outset. The report found that distributors did not materially profit from the disruption caused by the Iranian conflict and that the vast majority of price increases experienced by consumers were driven by higher wholesale and additional distributor costs outside the industry’s control.
The review also recognised that operating margins across the sector are typically modest and that households using heating oil generally have access to a number of competing suppliers. Taken together, these findings provide important context to what was an exceptionally challenging period for both customers and distributors.
Some may have expected me to use this opportunity to extract a public retraction of some of the wilder claims, but I don’t think that serves our customers, who should be at the heart of this conversation.
In the early days of the conflict, UKIFDA, on behalf of the industry, contacted the Department for Energy Security and Net Zero to raise concerns about the impact rising prices were having on our customers. At the same time, we worked diligently across the devolved nations to help secure financial support for the most vulnerable customers as quickly as possible.
While there were some who used precious time to point fingers, UKIFDA and the industry’s priority was to put the customer first. That remains our focus today.
Indeed, there is something almost buried in the CMA report that reinforces this point. The CMA commented, “feedback from consumer bodies suggested that, under normal market conditions, consumers raise few concerns with the service they receive”. One consumer organisation went further, reporting that “customers of home heating oil generally report better rates of customer satisfaction than other fuels.”
That is something our industry should be proud of. It reflects the dedication of distributors and their teams, who continue to provide a reliable and highly valued service to our customers and communities across the UK. The next step for our industry now is to maintain and strengthen that level of trust.
The CMA report also makes clear that, while the overwhelming majority of distributors acted in line with industry codes and legislation, a small number fell short. It is clear this was not to make a profit, but mistakes were made during an extremely difficult period, and where that happened, lessons must be learned and improvements made.
The report contains a number of recommendations, and I have already pledged to work with the CMA and government to identify practical, proportionate solutions that deliver real benefits for customers. That work is already underway.
However, I am clear that any changes must recognise the unique characteristics of our industry. Just as we have consistently argued that there can be no one-size-fits-all approach to the future of home heating, we must also ensure that any new processes reflect the realities of off-grid living and the needs of the customers we serve.
The CMA rightly acknowledged that our industry already does a great deal to support vulnerable customers. There is undoubtedly more we can do, but we should not assume that simply copying approaches used elsewhere will produce the best outcomes. Rural communities, off-grid households and the challenges they face are often quite different.
Vulnerability itself is a complex issue. As we prepare for another winter and face continued geopolitical uncertainty, we must focus on where we can make the greatest difference and do so quickly.
For me, one area stands out. There is a significant difference between a vulnerable customer and a vulnerable customer with an empty tank. Whether a crisis is caused by severe weather, fuel shortages or sudden price spikes, the situation becomes far more manageable when households have sufficient fuel in their tanks and when the industry, government and customers themselves have time to make informed decisions.
That is the kind of practical, real-world nuance that I believe should guide the next phase of this discussion.
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