The UK government today said it will allocate more than £50mn ($66mn) to low-income households to tackle the rising cost of heating oil as a result of the war in the Middle East.
Households in England will receive £27mn via the Crisis and Resilience Fund, which comes into effect on 1 April. The governments of Northern Ireland will receive £17mn, Scotland £4.6mn and Wales £3.8mn. It is unclear how this money wil be distributed to households.
Some UK homes use 1,000ppm sulphur kerosine for heating and hot water, a stricter specification than jet fuel. But unlike gas and electricity, energy regulator Ofgem does not cap heating oil costs, meaning those consumers are exposed to significantly higher energy bills. The government said it "intends to introduce new consumer protections for heating oil customers".
It directly attributed the rising cost of kerosine to the war in the Middle East, which has caused jet-kerosine to trade around double the price of crude. Northwest European jet fuel prices hit an all-time high of $1,646.25/t on 12 March, according to Argus assessments.
European jet fuel values have risen because supply is under extreme pressure. About 40pc of European jet fuel imports transit the strait of Hormuz, which Iran has effectively closed, Kpler data show. And Middle Eastern kerosine is often low-sulphur, meeting UK household specification, traders said.
