LOW-INCOME households across Wales are set to benefit from £3.8 million in support as part of a UK Government package aimed at helping families struggling with rising heating oil prices.

The funding forms part of a £50 million UK-wide support scheme announced by Chancellor Rachel Reeves, targeting rural households that rely on heating oil to warm their homes.

Heating oil prices have surged in recent months, with the cost of kerosene — the fuel used in most domestic oil tanks — rising sharply due to instability in the Middle East. Government figures indicate the price of kerosene has been particularly volatile and has increased faster than many other fuels.

Unlike gas and electricity customers, households using heating oil are not protected by Ofgem’s energy price cap, leaving them more exposed to sudden price increases.

Many families must also pay large upfront sums to refill their oil tanks, creating additional financial pressure during periods of rising costs.

The UK Government said the new funding is designed to support low-income households in rural areas, where alternatives such as mains gas are often unavailable.

Funding allocations were calculated using census data to identify areas with the greatest reliance on heating oil. In Wales, the £3.8 million allocation will be distributed by the Welsh Government, with the expectation that it will be used to support vulnerable households.

Chancellor Rachel Reeves said: “I know that for families in rural communities the sharp rise in heating oil prices is a real and urgent problem.

“That’s why we’re providing more than £50 million of targeted support to help the people who need it most.”

Secretary of State for Wales Jo Stevens added: “Wales has a high number of households who rely on heating oil and are feeling the pressure of rising bills.

“I know how worrying that is for families, which is why we are working with the Welsh Government to provide an extra £3.8 million to support the people who need it most.”

Energy Secretary Ed Miliband said the government was determined to tackle cost-of-living pressures.

He said:
“This government is committed to fighting people’s corner in tackling cost-of-living pressures. With this investment, alongside new measures to protect customers against unfair practices, we are standing up for the British people.”

Alongside the financial support package, ministers have announced plans to strengthen consumer protections in the heating oil market, which is currently not regulated by Ofgem.

Proposed measures include improvements to price transparency, dispute resolution, and support for vulnerable customers, as well as the creation of a Priority Customers Register to ensure those most in need receive help during supply disruptions.

The government is also considering introducing a dedicated regulator or ombudsman for the heating oil sector and has asked the Competition and Markets Authority (CMA) to closely monitor pricing in the market.

The CMA is already examining reports of cancelled orders followed by higher quotes and price increases for automatic deliveries. It has announced plans to conduct a detailed investigation into the UK heating oil market.

Households facing immediate financial difficulties due to rising heating oil prices are being advised to contact their local authority to find out what support may be available.

Welsh Liberal Democrat MP for Brecon, Radnor and Cwm Tawe David Chadwick said: “Today’s announcement by the Prime Minister doesn’t go far enough. We need an energy price cap in place to stop repeated rises and profiteering by suppliers.

“Families in rural Wales are worried sick as heating oil bills spiral out of control. The Government’s latest announcement risks leaving too many households falling through the cracks.

“Heating oil customers have been completely defenceless against skyrocketing global prices. Instead of temporary sticking plasters, we need an immediate VAT holiday on heating oil and LPG alongside a proper price cap so rural households get the same protections as those connected to the grid.

“I am hearing from hundreds of constituents who are terrified about how they will pay their next bill. It is completely unfair that people living in rural areas have been left high and dry while prices surge because of instability in the Middle East.”

The Welsh Liberal Democrats also said the Government should take longer-term action to reduce bills by improving home insulation and ensuring new homes are built to zero-carbon standards, helping households reduce their reliance on expensive fossil fuels.