Following a stark warning from fuel suppliers and the trade association UKIFDA (UK and Ireland Fuel Distributors Association), I have called on the UK Government to consider a temporary respite from the 5% VAT rate on domestic heating oil to help protect rural and off-grid households from severe winter price pressures.
Disruptions to the fuel market and wholesale jet fuel and kerosene prices spiking from 44p per litre to 99p per litre have driven up heating oil costs across the region. The UKIFDA estimate that high costs have led to a 20% to 30% reduction in heating oil sales over recent months – the equivalent of 160 litres per household – as consumers delay orders in the hope that prices will drop.
Industry experts warn that holding off leaves households with historically low tank levels, risking fuel exhaustion during peak winter weather when physical road deliveries become logistically more difficult.
A significant number of my constituents across Aberdeenshire North and Moray East live in off-grid rural communities and rely entirely on heating oil to warm their homes. They do not enjoy the protection of mains gas price regulation, making them especially vulnerable to sudden international price spikes.
When consumers delay filling their tanks due to cost, it creates a serious resilience issue. Running tanks empty in the middle of a cold Scottish winter could pose severe health risks and logistical headaches.
I agree in principle with the proposal that a temporary respite from the 5% VAT on domestic heating oil is a sensible and practical step that the Treasury should take. I have therefore written to the Chancellor asking him to examine this proposal to bring meaningful relief to off-grid families and to consider mirroring the tax relief previously applied to household electricity.
I’ve also highlighted existing support measures available to Scottish households. The Scottish Government’s Emergency Heating Oil Scheme – administered via Advice Direct Scotland – provides direct £300 grant payments to help eligible low-income and vulnerable households cover off-grid fuel costs.
While I will continue pressing the UK government to take action on VAT, I urge constituents across Aberdeenshire North and Moray East not to let their oil levels run dangerously low.
And I also strongly encourage anyone struggling with heating costs to check their eligibility for the Scottish Government’s support schemes or reach out to my office for assistance.
