CMA issues open letter to heating oil suppliers warning that unfair contract terms cancelling orders during price spikes breach consumer protection obligations
The Competition and Markets Authority (CMA) published an open letter on 10 September 2026 addressed directly to domestic heating oil suppliers, warning that the terms and conditions in their consumer contracts must be fair and transparent. The CMA's focus is on clauses that seek to remove or reduce a supplier's liability to consumers, particularly where a supplier fails to perform its contractual obligations or causes delays in delivery. The letter follows earlier CMA intervention into concerns that some domestic heating oil suppliers cancelled orders when prices and demand surged following conflict in the Middle East. The authority previously secured voluntary compensation from suppliers after finding that hundreds of customers who ordered through an intermediary comparison site were affected when their orders were cancelled at the point of price spikes. The backdrop is severe: the average price of heating oil stood at 97.05p per litre on 9 September 2026, up 85% since September 2025, when it was 52.8p per litre. Approximately 1.5 million UK households rely on heating oil, primarily in rural areas, and unlike gas and electricity customers they fall outside the energy price cap. A household wanting to fill a standard 1,000-litre tank now faces a bill of over £970. The government announced a £53 million support package for low-income heating oil households in March 2026, distributed through local authorities. The Department of Energy Security and Net Zero noted it had cut VAT on electricity bills and removed £150 in costs from bills earlier in the year, and indicated it would continue to examine what further action it could take.
Why this matters
The CMA's open letter is a soft-enforcement step that signals the regulator is prepared to escalate to formal consumer protection action if suppliers continue to rely on unfair cancellation clauses during price spikes driven by geopolitical events. Because heating oil consumers are outside the energy price cap framework, they have weaker structural protections than gas and electricity customers, making contractual terms the primary lever. The combination of an 85% year-on-year price increase and the approaching winter creates acute political and regulatory pressure, and the CMA's intervention sits alongside a wider government review of the sector. For suppliers, the letter is effectively a compliance warning that the regulator is watching: continued use of liability-exclusion clauses during emergencies risks formal enforcement proceedings. The wider precedent is important for any sector where commodity price shocks create incentives for suppliers to cancel fixed-price contracts.
On the Ground
Consumer protection and energy regulatory practices are directly activated. Suppliers will need advice on reviewing and redrafting their standard terms and conditions to ensure cancellation and liability-limitation clauses comply with consumer contract fairness requirements. Firms advising clients in the heating fuel supply sector should now be conducting urgent contract audits. A trainee on this matter would assist with drafting compliance gap analysis memos comparing existing supplier terms against consumer protection standards, preparing regulatory notification drafts, and tracking the CMA's ongoing heating oil consumer protection enforcement case.
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“What consumer protection obligations do heating oil suppliers owe to residential customers, and how does the CMA's open letter fit into the enforcement toolkit?”
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