OVER £50 million has been pledged by the government to help families with their energy bills – but experts are warning that “this looks less like a solution and more like an emergency sticking plaster”.
The price of kerosene, the fuel used for heating oil, has been particularly impacted by the conflict in the Middle East and is currently double that of crude oil.
In the UK, unlike gas and electricity customers, those who heat their homes with oil are not covered by the energy price cap, meaning they are exposed to more immediate energy price hikes.
Many, including some of the most vulnerable households, will need to pay an upfront lump sum to top up their tanks in order to maintain their heating and hot water.
The issue is particularly acute in Northern Ireland, where about 500,000 homes use it, almost two-thirds of all households.
About 3% of households in England and Wales said oil was their only source of central heating, according to a 2021 census, and 5% of households in Scotland.
Chancellor of the Exchequer Rachel Reeves said: “Heating oil prices have spiked sharply, and I know that for families in rural communities that is a real and urgent problem.
“That’s why we’re putting over £50 million of support to help the people who need it most, including funding for the Northern Ireland Executive to deliver support in Northern Ireland where this issue hits hardest. ”
This looks less like a solution and more like an emergency sticking plaster
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said this support is not affordable for the government.
She added: “This looks less like a solution and more like an emergency sticking plaster. The problem is not heating oil in isolation, but a broader inflationary and geopolitical squeeze across the energy complex. A large part of the end price is wholesale cost and tax, so when crude and refined product prices rise, households are hit quickly and the state is left reacting afterwards.
“On that basis, it would be surprising if support stopped with heating oil users. Rising energy costs feed into transport, food, distribution and wider household bills, so political pressure to help others is likely to grow. However, the government is already in a debt trap, and a highly indebted UK economy can’t absorb another inflationary wave without strain.
“Further support may become politically necessary, but it is not affordable in any clean sense. It is ultimately paid for through more borrowing, greater pressure on bond markets, or further erosion of purchasing power.”
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, said the government is acting out of panic.
She added: “£50 million for heating oil users? About time, but let’s be honest, it’s a panic move, not a plan. These families have been hung out to dry for years with no price cap and bills that spike overnight. But here’s what worries me: if the government can suddenly find fifty million quid when the pressure’s on, where’s the help for everyone else still drowning in energy costs?
“You can’t cherry-pick who deserves support based on their boiler type. Energy poverty is energy poverty. And as for whether they can afford it, they’ll afford what they have to when the headlines get loud enough.
“The real issue? We’re governing by crisis, not strategy. Throw money at the fire, move on, repeat. That’s not leadership, it’s firefighting. And it’s expensive.”
You can’t cherry-pick who deserves support
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said the government will be under pressure to help other groups with their energy bills.
He added: “£50 million is a sticking plaster on a predictable design flaw: off grid households are exposed to wholesale shocks with no cap, then asked to find a lump sum at short notice. That is not a market, it is a fuel poverty trap. If ministers only intervene when prices spike, they will be forced back again for other groups.
“The pressure will spread to bottled gas, rural transport, and anyone facing upfront costs the tariff model ignores. The honest fix is an automatic stabiliser: clear eligibility, pre funded support, and payments triggered by price thresholds rather than headlines.
“Can the government afford it? It cannot afford the current stop start model. Ad hoc schemes cost more to run, arrive late, and miss people who do not know how to apply. Set rules, publish the data and outcomes, then you can defend the spend and stop turning winter heating into a yearly scramble.”
Photo by Diana Polekhina on Unsplash.
