Chancellor to offer support over rising heating oil costs

Chancellor Rachel Reeves is to offer a package of support to households struggling with higher heating oil costs following the global impact of the US-Israel war in Iran.

In an interview with the Times, Reeves said she has "found the money" to help, adding the Treasury is also looking at "different options" to help those most vulnerable to soaring energy bills.

The increase in global oil prices has caused a spike in heating oil costs, commonly used in rural areas not connected to the main gas grid. It is not covered by the regulator Ofgem's energy price cap which is set to fall in April. The support is expected to be announced early next week.

A spokesperson for the government said Reeves would take the necessary decisions to help families with the cost of living and protect the public finances.

About 1.7 million households in England and Wales rely on kerosene for heating and hot water but, unlike gas and electricity, prices are not capped and are subject to volatility.

Since the start of the US and Israel's assault in Iran, households using heating oil have seen their bills double, orders cancelled - and some have been unable to get heating oil at all.

"We've worked through with MPs and others a response for people who are not protected by the energy price cap," Reeves told the Times.

In terms of plans for gas and electricity bills, the chancellor said ahead of the next price cap in July, the government is working through "different scenarios" and will look at "more targeted options".

Household energy bills are set to fall by 7% in April, Ofgem previously announced, following a shake-up in charges by the government.

However, prices are still about a third higher than before the war in Ukraine, and billpayers in debt have ballooned.

As the conflict continues to rage in the Middle East, gas and electricity bills could face dramatic hikes from July - after Ofgem's price cap lifts - due to increases in wholesale gas prices.

Reeves's comments come after ministers met with petrol retailers on Friday as the jump in oil costs has caused prices to rise to an 18-month high.

The Petrol Retailers Association (PRA) rejected ministers' suggestions "price gouging" had been taking place and briefly threatened to withdraw from the meeting.

Speaking before the talks, Energy Secretary Ed Miliband said he and the chancellor were "really concerned" over what was happening in some parts of the market, noting that the competition watchdog had raised concerns in December.

He said he and Reeves met the Competition and Markets Authority earlier in the week to discuss heating oil and motor fuels specifically.

Fuel duty, which is currently frozen, is set to rise in September. That was now under review, Miliband has confirmed.

Conservative leader Kemi Badenoch has called on Reeves to scrap the increase, and urged the UK to "start drilling" for oil in the North Sea.