UK SMEs brace for doubled heating oil energy bills
UK SMEs using heating oil expect bills to more than double as conflict-linked fuel prices hit records; regulators and FSB raise scrutiny.
Atlas Newsdesk ·
Thousands of small and medium-sized enterprises (SMEs) in the United Kingdom are preparing for energy costs to rise sharply, with many expecting their bills to more than double as heating oil prices jump amid the ongoing conflict in Iran.
The impact is concentrated among firms that depend on heating oil for space heating and hot water. Around 7% of all UK SMEs use heating oil, and the share rises to 17% for rural SMEs , according to the figures cited. Heating oil is described as being linked to jet fuel prices, leaving these businesses exposed when aviation-related fuel benchmarks move higher.
Some companies have already begun limiting consumption in response to the price shock, rationing fuel to manage immediate cash pressures. The rise in costs is being attributed to heightened market anxiety tied to the Middle East conflict, which has fed through into refined fuel pricing in Europe.
Market intelligence firm Argus reported that North-west European jet fuel prices moved above $1,900 per tonne on Thursday, while diesel exceeded $1,600 per tonne , both reaching new record highs. Argus said the move reflected concerns among market participants about the Middle East conflict, a dynamic that can influence pricing for fuels connected to heating oil.
The Federation of Small Businesses (FSB), which represents about 200,000 businesses , has urged the UK’s competition watchdog to examine the heating oil market. The call comes as smaller firms face a different set of protections than households, with the source material noting that small businesses do not benefit from government energy price caps or consumer safeguards available to domestic customers.
Ofgem, the UK energy regulator, said it has reminded non-domestic suppliers and brokers of expectations around fair treatment and clear pricing. The regulator also acknowledged volatility linked to the Middle East conflict, underscoring the pressure on businesses that must buy fuel in a rapidly changing market.
For global markets, the episode highlights how geopolitical tensions can quickly transmit into refined fuel benchmarks used across regions, including Europe. The immediate uncertainty for UK SMEs is how long elevated prices persist and whether pricing practices in the heating oil market remain transparent as volatility continues.