The UK Chancellor, Rachel Reeves has announced that the government is getting ready to help households that are struggling with the rising costs of heating oil. The ongoing conflict involving the US and Israel in Iran has disrupted the oil market and caused heating oil prices to rise.
Rachel Reeves said in an interview with The Times that she has already found the money that is needed to help these households. She also said that the Treasury is thinking about options to help the households that are most vulnerable to the rising energy bills.
Heating oil prices have gone up a lot in weeks because of the higher global oil prices. Many households in rural areas rely on heating oil, especially those that do not connect to the main gas grid. Unlike gas and electricity, the Ofgem energy price cap does not protect heating oil prices. As a result, rising costs have hit families who depend on heating oil particularly hard.
1.7 million homes in England and Wales use kerosene for heating and hot water. Since the conflict got worse some households have said that their heating oil bills have doubled. While others have had their orders cancelled or have struggled to get supplies. Know More
Rachel Reeves said the government has been working with Members of Parliament and other stakeholders to develop a plan to help people who the energy price cap does not protect. She said that the government will announce the support package next week.
At the time the government is also thinking about ways to manage future increases in gas and electricity bills. The next energy price cap update is in July. Officials are already looking at different scenarios and more targeted forms of support if prices go up again. Read More
Energy bills are going to go down by 7% in April according to Ofgem because of the changes made by the government to some energy charges. However with this decrease household energy costs are still about one-third higher than they were before the Ukraine war. And many families are still struggling with debt from energy bills.
The government is also dealing with the rising petrol prices. The Energy Secretary, Ed Miliband met with petrol retailers to talk about the issue after fuel prices went up to their level in 18 months. The Petrol Retailers Association said that companies were not unfairly increasing prices. And they briefly threatened to walk out of the meeting with ministers.
Ed Miliband said that the government is worried about what’s happening in some parts of the fuel market. He said that he and Rachel Reeves had recently talked to the Competition and Markets Authority about the issue. About heating oil and motor fuel prices.
The government is also reviewing fuel duty. It has kept the duty frozen for some time but plans to increase it in September. The Opposition leader, Kemi Badenoch has asked the government to cancel the planned fuel duty rise. She also wants the UK to increase oil production by allowing more drilling, in the North Sea.
