There Will Be No Price Cap on Heating Oil. What the Government Agreed to Instead

Around 1.5 million households in the UK heat their homes with oil. Gas and electricity sit under the Ofgem price cap, but oil is bought by the tanker-load at whatever the distributor quotes on the day, and nothing sits between the household and that price.

On 13 October 2026 the government published its response to the Competition and Markets Authority’s market study into heating oil, and it confirmed that this isn’t going to change. In its own words: “the government is not proposing simply to replicate the gas and electricity price cap for heating oil.”

What it has agreed to instead is a regulator for oil distributors. It hasn’t given that a date.

Why there is no cap

The CMA published its final report on 15 July 2026, after a winter that tested the market hard. The government’s response puts the price at around 55p a litre in February 2026, before the conflict in the Middle East, and 104p a litre in March. It adds that, at the time of writing, prices are rising again.

The CMA looked at whether distributors had used that spike to widen their margins, and concluded they mostly hadn’t. As the government’s response summarises it, the rises “largely reflected higher wholesale costs, rather than suppliers making excessive profits”, and the market is generally competitive. On that finding it advised against regulating distributors’ prices at this stage, and the government agreed.

So the case the CMA made is not about the price. It’s about how a household is treated when it buys: how a quote is given, what happens when an order is cancelled, what support a vulnerable customer gets, and where to go when something goes wrong. On all four, an oil customer has less protection than someone on mains gas.

What the government agreed to

The CMA made five recommendations and put one further option to the UK government. None was rejected.

The regulator is agreed only in principle. The response calls a regulatory regime “the only sustainable way to address the gaps in this market”, then sets no timetable for it: “Getting that regime right will take time.” It names the Ofgem Review published in April 2026 as the framework for considering one, and says it will need “the right legislative framework to take this forward.” There is no consultation date and no bill.

What changes this winter

In law, nothing. The near-term work is recommendation 2: the government will work with Ofgem and the trade bodies on their existing codes of conduct and on access to dispute resolution. That’s an improvement to a voluntary arrangement rather than a new right.

Two findings in the response bear on how you buy this winter.

There’s no legal minimum order. The response says so directly: the regulations “do not prescribe a minimum order volume.” The smallest delivery a distributor can make depends on the measuring equipment fitted to each tanker, and “some systems are approved for smaller deliveries.” So a supplier’s minimum is a practical limit on its fleet or a commercial choice, not a rule. If a full order is more than you can pay for at once, it’s reasonable to ask whether a smaller delivery is possible and why the minimum is what it is, which is exactly what recommendation 4 would make distributors explain.

Payment plans exist and aren’t always visible. Recommendation 4 is there because the CMA found they’re poorly signposted. Until a code requires it, the way to find out is to ask the distributor before you order.

The money that is open now

The response lists the support already in place, and none of it is new.

For low-income households: the government announced over £50 million in March 2026 for households heating with oil. In England it is paid by local councils through the Crisis and Resilience Fund, in the areas with higher rates of oil heating, so the place to ask is your council. Funding also went to Wales, Scotland and the Northern Ireland Executive. Northern Ireland separately runs its own £100 Home Heating Oil Support card, open until 31 March 2027.

For getting off oil: the Boiler Upgrade Scheme, in England and Wales, pays £7,500 towards an air source or ground source heat pump. A home heated by oil or LPG with no mains gas connection can claim an extra £1,500, taking it to £9,000, until March 2027. That deadline is the uplift’s, not the scheme’s, and it’s easy to miss. The response cites the scheme’s August statistics: 38% of its grants have gone to homes off the gas grid.

Northern Ireland and Scotland

Recommendations 1 to 5 apply in Great Britain only. Heating oil policy is a matter for the Northern Ireland Executive, which is considering the CMA’s report separately, and Northern Ireland already has the Consumer Council’s price checker that the CMA held up as the model.

On price transparency the response agrees with the CMA that comparison tools work reasonably well in normal conditions, cover Scotland less well, and fall away across Great Britain when prices spike, which is when they’re needed. It will assess whether that gap justifies a government tool, and it hasn’t committed to building one.

What’s missing

Each commitment in the response is a direction rather than a date: the regime, the legislation it needs, the minimum-order review, and the price checker assessment. For a household on oil, this winter looks like last winter, with a better-documented case for change behind it.

Every figure, date and quotation above is taken from the Department for Energy Security and Net Zero’s response to the CMA heating oil market study (published 13 October 2026) and GOV.UK’s Boiler Upgrade Scheme guidance, both read on 16 October 2026. Energy Pages is an independent information service, not a government body, a supplier or an installer.