Chancellor Rachel Reeves has suggested that using taxpayer money to help households struggling with soaring heating oil costs is "not the solution".
Instead, the Chancellor has instructed the Competition and Markets Authority (CMA) to examine heating oil prices alongside petrol station costs amid concerns that some suppliers may be exploiting the current crisis.
Ms Reeves made clear she would not offer financial relief to affected customers through public funds, arguing that tackling the underlying causes of the price surge represents a more effective strategy than direct Government spending.
Approximately 1.5 million properties across the UK rely on heating oil to keep warm, representing roughly five per cent of all homes.
The Chancellor has suggested public funding is 'not the solution' to address oil price hikes
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These households have witnessed costs double over the past week as the Middle East crisis has intensified following Iranian military action in response to US and Israeli attacks.
Unlike customers on mains gas and electricity, heating oil users have no protection from Ofgem's price cap, leaving them exposed to dramatic market fluctuations.
The Chancellor acknowledged the "unique issues" facing these consumers, with rural areas bearing the brunt of the impact. Northern Ireland faces particular challenges, where six in ten households depend on heating oil.
Liberal Democrat energy spokesperson Pippa Heylings urged the Government to implement a three-month VAT exemption on domestic heating oil.
Pensioners are expected to bear the brunt of the looming hike in energy bills | GETTY LATEST DEVELOPMENTS
The price of Brent Crude oil has fallen over the last 24 hours, although it remains higher than in previous days and weeks | OILPRICE.COMSpeaking during Treasury questions, the South Cambridgeshire MP highlighted the plight of rural and semi-rural constituents who have seen their heating costs double within a week.
"I've heard the Chancellor is considering potential measures to support them," Ms Heylings said, before asking whether Ms Reeves would back her party's proposal for VAT zero-rating on residential heating oil.
She pressed for additional protections against what she described as "massive spikes" affecting household bills across numerous constituencies represented in the Commons chamber.
The Chancellor outlined two distinct factors driving the heating oil crisis in her response to MPs.
Donald Trump has told US media that the Iran war is 'very complete,' in the biggest indication to date the end could be in sight for the 10-day long war | GETTY"First of all, you've got the conflict in the Middle East, which we're trying to de-escalate," Ms Reeves told the Commons, adding that the second issue was price gouging by suppliers.
She emphasised that shipping disruptions through the Strait of Hormuz lay at the heart of the problem, with some businesses taking advantage of the situation to overcharge consumers.
The Chancellor added: "Let's deal with that, rather than throwing public money at something which is not the solution."
Treasury minister Lord Livermore is scheduled to meet with MPs on Wednesday to address the ongoing concerns.
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