Starmer announces £53m support to help with heating oil costs

The government has pledged £53 million to assist vulnerable households that have been affected by a dramatic increase in the cost of heating oil, according to Prime Minister Sir Keir Starmer.

As the price of crude oil has risen above $100 (£75) per barrel since the start of the US-Israeli war with Iran, heating oil prices have increased.

Unlike consumers who use gas and electricity for heating and hot water, oil prices for households using oil are not set by regulator Ofgem.

As a result, these households were among the first to feel the effects of rising crude prices, and some customers claim their bills have doubled.

The problem is particularly acute in Northern Ireland, where around 500,000 households use it, nearly two-thirds of all households.

According to a 2021 survey, approximately 3% of households in England and Wales said oil was their sole source of central heating, and Scotland accounts for 53%.

The government has stated that its funding would be targeted to assist low-income households in rural areas impacted by the recent increase in costs, although it has not announced who will be eligible.

The extra money will be dispersed by local authorities in England via the Crisis and Resilience Fund, which goes into operation on April 1st and replaces the temporary Household Support Fund.

The funds in Scotland, Wales, and Northern Ireland will be distributed directly to the devolved governments.

with the hopes that they will be used to help homeless households,

the government said.

Northern Ireland will be paid £17 million, England £27 million, Scotland £4 and Scotland £4.6m and Wales £3. 8m.

Since the market is not regulated by Ofgem, the government is ethically looking for new safeguards for heating oil customers.

Sir Keir confirmed the assistance. The UK antitrust authority had flagged reports of cancelled orders and prices being pushed higher, according to Sir Keisr.

If the businesses break the rules, court action will ensue,

Sir Keir said.

The prime minister also said that the government will continue to work toward a swift conclusion of the Middle East conflict "because ending the war is the quickest way to lower the cost of living.

Responding to the government's announcement, Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said it wanted to know how the service would function and who would qualify.

While greater regulation was a very positive step, Francis said, "At the time it seemed more like a signal of intention than a concrete plan.

"Households that rely on heating oil need clarity and protection because they are among the most vulnerable to global fossil fuel price shocks.

According to Liberal Democrat leader Ed Davey, the proposals would result in "too many households falling through the cracks and missing out on assistance.

"We need an immediate three-month VAT holiday on heating oil as a result of temporary sticking plasters and the enactment of a proper price cap. They are entitled to the same rights as those on the grid.

Crude oil hit nearly $120 a barrel last week before falling back. Oil is now priced at about $106 a barrel, but it is still much higher than it was before the war began.

Prices have risen largely as a result of the effective closure of the Strait of Hormuz, a critical waterway that supplies a quarter of the world's oil supply.

The energy cap, which is set by the regulator Ofgem, protects household gas and electricity bills in England, Wales, and Scotland for now. Bills will fall in April under this cap.

However, what happens on the wholesale energy market from now to late May will determine what happens to household bills from July. A sustained rise in energy prices for millions could result in a dramatic rise in electricity prices for billions.

Following Covid and Russia's annexation of Ukraine, the government had to step in to assist with the Energy Price Guarantee, the last time there was a big spike.

Miliband told the BBC that if it's important to intervene, we will on energy bills. However, he continued, any intervention would be dependent on the severity of the disaster's ramifications.

Shadow energy security secretary Claire Coutinho urged the government to implement the cheap power strategy that was unveiled last year, which included lowering bills immediately.