Committee publication · Correspondence · 25 March 2026
Correspondence from UKIFDA relating to heating oil, dated 23 March 2026
Summary
Ken Cronin, CEO of UKIFDA, declines an invitation to appear before the Energy Security and Net Zero Committee on 23 March 2026, citing the acute demands of the heating oil crisis. He explains that jet fuel prices have more than doubled due to Middle East supply disruptions and the Strait of Hormuz blockade, driving heating oil prices from 44p to 108p per litre. UKIFDA is engaged with government departments and the CMA review to direct emergency funding to vulnerable customers and address market volatility.
Key findings
- Jet fuel wholesale prices have risen from 44.20p per litre (1 January–24 February 2026) to 108p, driven by 40% of Europe's jet fuel supply being blocked via the Strait of Hormuz and increased shipping freight rates.
- The heating oil market consists of many small, family-run local distributors with minimal storage (often none or two days' supply) who buy daily at market price and have no ability to hedge, making them price-takers in volatile conditions.
- Current daily price volatility of up to 10p per litre makes it impossible for distributors to quote fixed prices; UKIFDA guidance requires communication of volatility to customers with final pricing given nearer delivery time.
- UKIFDA has proactively engaged 160+ rural MPs, coordinated with Ministers Shanks and McCluskey, and is actively supporting a CMA review into price practices while prioritising rapid deployment of government emergency funding to vulnerable households.
- Future mitigation options under discussion include price caps, strategic UK fuel storage, VAT reductions, and renewable liquid fuels (HVO) to reduce dependency on Middle Eastern imports.
Tone
ProceduralTopics
Key actors
Ken Cronin, UK and Ireland Fuel Distributors Association (UKIFDA), Bill Esterson MP, Minister Shanks, Minister McCluskey, Competition and Markets Authority (CMA), Department for Energy Security and Net Zero
Notable line
“The reality is that the current significant and sudden increases in heating oil prices are as a direct result of the European jet fuel price having more than doubled since the start of the conflict.”
Key Quotes
“Many of my members have been dismayed by commentary regarding price gouging and profiteering when faced with the twin challenges of unprecedented demand and sudden price spikes which have left many honouring loss-making orders …”
“The main price driver of heating oil in the UK and Ireland is the wholesale price of jet fuel which is traded on the European market. This is because jet fuel and heating oil are kerosene based.”
“In 2025, at least 40% of Europe's jet fuel came from the Middle East via the Strait of Hormuz which is currently blocked.”
“Given the current technology, the industry's view is that in order to satisfy the legislation its guidance to members is set the minimum order at 500 litres.”
Source · parliament.uk record ↗