UK households using heating oil are feeling the pinch of escalating costs due to the ongoing conflict in the Middle East. Approximately 1.5 million households rely on home heating oil, which is not covered by the Ofgem price cap that regulates energy charges.
According to the End Fuel Poverty Coalition, the price of heating oil has surged to levels unseen since the early stages of the Ukraine invasion. Some customers are reporting a significant increase in the cost, with 1,000 liters now priced at nearly £985, up from £670 in January.
Simon Francis, coordinator of the End Fuel Poverty Coalition, highlighted that these households are particularly vulnerable to fuel poverty as the expenses for energy-efficient home upgrades can be prohibitive. He emphasized the immediate impact of surging oil prices on rural and off-grid homes, stressing the need for urgent assistance.
Financial expert Martin Lewis also issued a cautionary statement for heating oil users, pointing out the lack of regulation and protection in the market. The disruption in oil supply routes through the Strait of Hormuz has contributed to a rise in oil prices, with Brent Crude Oil reaching around $87 per barrel.
Additionally, energy suppliers are reducing fixed-price tariff options, and the new Ofgem price cap set to take effect in April will lower annual costs for a typical dual fuel household. However, analysts predict a potential 10% increase in energy prices from July onwards, driven by escalating gas prices.
Cornwall Insight forecasts a significant rise in the Ofgem price cap for the third quarter of the year, potentially reaching £1,801 annually. The final cap amount will be influenced by wholesale price trends over a three-month period, contingent on the duration of the Middle East conflict.
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