Heating Oil Prices: Rural Areas

David Smith Excerpts

Wednesday 4th November 2026 Westminster Hall

[David Smith (North Northumberland) (Lab)]

I commend the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this important debate.

As the first missiles went into Iran, bills doubled for the households in my constituency that use heating oil—there are about 5,000 of them. It was a terrible moment, and I am really pleased that the Government stepped in with the £53 million we have been talking about. In March this year, £5 million was given to the Conservative-run Northumberland county council for the crisis and resilience fund, which can be used for heating oil. The CRF can be used for heating homes, but it is very opaque; it is unclear how that money is being used and how much has gone the door. I have been asking, and I have not yet got a clear understanding.

I am pleased that Labour have provided further relief. They are providing £100 for energy bills for households in council tax bands A to D this winter. They are cutting the kerosene tariff—I will be chasing suppliers in my constituency to make sure they pass that on to consumers—boosting the boiler upgrade scheme, and so on. It is welcome that we are bringing in regulation to heating oil.

All the responses we have heard today follow an important principle: do not mess with the market when it is working, and do not let the market mess with people when it is not—that is where we have to step in. I ask my hon. Friend the Minister: what if higher heating oil prices are here to stay? What can we do in the medium to long term? I welcome the short-term measures we are taking.

Last year, I spoke to a development trust in Norham that wants to introduce a local grid in my constituency using renewables, solar and wind. Great British Energy, which I fully support, is supposed to support little communities like that. If we can circumvent this problem and get people off heating oil where possible, and if we can empower communities to have local grids, that is what we should be pursuing. Will the Minister say something about progress on that?

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[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Barker. I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this important debate and for his thoughtful and eloquent speech. We have had a good debate this afternoon, which has highlighted the additional costs that fall upon our rural communities. I thank my hon. Friend the Member for Fylde (Mr Snowden) for his contribution, and I trust that he will not forget to top up his tank before Christmas. The hon. Member for South West Norfolk (Terry Jermy) highlighted the need for local councils to take a proactive approach to getting Government money out the door as quickly as possible. It seems that some councils are not doing that terribly effectively.

About 1.4 million households across the UK rely on heating oil, predominantly in rural areas, including many in my constituency. For those households, using heating oil is not a choice. Most are not connected to the mains gas network and have little practical alternative when it comes to heating their homes. They face particular challenges. They are exposed to unpredictable delivery costs and the burden of paying hundreds, sometimes thousands of pounds, up front to fill their oil tanks. Many are older and more vulnerable households, which simply cannot absorb sudden price shocks.

Recent international developments have demonstrated just how exposed those households have become. Disruption to oil supplies and shipping routes drove up household prices, with consequences quickly felt here in the UK. Households that had been paying £300 for 500 litres of heating oil suddenly faced quotes of between £600 and £1,000. For many families, that was simply unaffordable.

The Conservatives raised these concerns with the Government at the time and, after rather too much delay, some support was eventually provided through the crisis and resilience fund. While welcome, it addressed the consequences rather than the cause of the problem. That is why the Competition and Markets Authority’s investigation was so important. Following reports of cancelled orders, sudden price increases and demands for additional payments, the CMA identified significant concerns in the way that parts of the market were operating. The CMA intervened where suppliers may have breached contractual obligations by cancelling orders after prices surged, and secured compensation for affected customers. I welcome that intervention. However, investigations after the damage has already been done do not fix the issue.

I know that the Minister will refer to the Government’s intention to regulate the heating oil sector. I welcome the fact that action is finally being considered, but households deserve more than good intentions. Can the Minister tell us when the Government expect to implement the CMA’s recommendations and when consumers can expect to see tangible improvements? What timetable has been set for the Government’s work on price transparency and consumer choice, and when will Parliament be updated on the progress? Those questions matter because winter does not wait for reviews, assessments or consultations.

Some of the announcements in the Budget may have sounded impressive on the day, but for many households they will hardly be noticed. There may be £100 for certain households, but when some people’s energy bills are set to rise by more than £500, many will reasonably ask, “What was the point?” It is clear, however, that the Chancellor has at least noticed the Conservatives’ cheap power plan. Cutting VAT and scrapping carbon levies on energy bills—I find myself wondering where he might have got those ideas from. The broader problem is that the Government appear more interested in managing the consequences of high energy prices than in addressing their causes.

[David Smith]

On the hon. Member’s point about managing consequences, I welcome his positivity about the things that the Government are doing, but does he agree that it was a terrible idea for the last Government to abandon the UK’s gas storage in 2015?

[Sir Ashley Fox]

That is a complicated issue, because of course the cost of managing Rough would have meant a levy on gas bills, so it is not quite the easy solution that the hon. Member proposes. It is not as if gas storage automatically reduces all gas bills; in the long term, it may actually lead to higher costs for gas consumers. It is an important issue, but that is not the simple fix that the hon. Member claims.

The United Kingdom possesses significant oil and gas resources, world-class expertise and a highly skilled workforce, yet key decisions continue to be delayed. The decision on Jackdaw, for example, was delayed for months. I wonder why. Could it possibly have been an inconvenient by-election in Holborn and St Pancras? The future of Rosebank remains uncertain. Time and again, Ministers have chosen hesitation over action.

Good policy is not simply making an announcement; it is having a plan, delivering that plan and achieving results. That is the test by which households reliant on heating oil will judge this Government: are their energy bills lower? For millions of people, this debate is not about regulation or market design; it is about whether they can afford to keep their homes warm this winter. Rural families should not be disadvantaged simply because they live beyond the gas grid. Affordable energy should not depend on someone’s postcode, and far too often this Government forget our rural communities.

The Government talk repeatedly about managing expensive energy. That is not enough. People do not want expensive energy to be managed; they want energy to be made affordable. Let us therefore have clear deadlines, measurable commitments and action, not an obsession with process. If Ministers cannot tell households when they will feel the benefit of those reforms, all they are offering is more process and more delay. Families facing another winter of high costs cannot afford to wait. Those households need lower bills, warmer homes and a Government focused on making energy cheaper.